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FINANCE DEPARTMENT
PREFACE
This White Paper is a policy document used as a means of presenting
government policy preferences and it performs the dual role of presenting
governments policies while at the same time inviting opinions thereon.
White Paper is an explanatory guide through the maze of statistics and
budgetary estimates given in the complicated budget books. It aims at elaborating
governments policies and decisions that steer the budget formulation process. It
enables even a casual reader to understand various projections and budget
estimates.
The Executive Summary to the White Paper provides a brief overview of
economic environment that propelled policy decisions that translated into
budgetary targets. A chapter on Annual Development Programme presents
salient features of the development initiatives taken and to be undertaken or
continued in the next financial year. Various other Chapters have been included
detailing Estimates of Receipts & Expenditures, Public Account, Over view of
Fiscal Management Reforms, Debt & Contingent Liabilities, Local Revenue
Authority, and Local Government Finance.
Like all budget Documents, White Paper is the outcome of a team effort of
the officers and officials of the Finance Department. I acknowledge and
appreciate the pain stacking efforts of Mr. Furqan Ahmad, Composer, Mr. Socrat
Aman Rana, Deputy Secretary (Resources), Mr. Mahmood Hassan, Additional
Finance Secretary (Budget) and Mr. Ahmad Raza Sarwar, Special Secretary
Finance, in preparing the White Paper.
CONTENTS
Chapter
Contents
Page No.
Executive Summary
1
Executive Summary
(i)
EXECUTIVE SUMMARY
On the economic front, the country is facing many challenges mainly from power
shortages and terrorism that are not allowing the country to achieve its true economic potential.
Despite all these challenges, the national economy managed to grow by 4.14% during FY 2013-14.
The country also showed significant improvement on external front as the Foreign Exchange
Reserves reached a comfortable level while exchange rate remained stable.
Overall confidence on Pakistans economy is increasing in the international markets. The
Stock Exchange (KSE-100 index) which is considered a leading indicator of an economy,
increased by 46% in a short span from May 2013 to May 2014 it rose from 19,916 to 29,543
points. As a result of prudent fiscal and monetary measures taken by the Federal Government,
inflation came down to single digit during July May 2014 (8.26%) from the average of around
12% during the last five years.
Fiscal Deficit, which was 5.5% during Jul-Apr 2012-13, is reducing for the corresponding
period of this year. Tax-to-GDP ratio, however, remained 9.7% which is significantly lower than the
countries at similar development status. Although FBR registered a handsome growth of 16.4% in
revenue collection during 11 months of FY 2013-14, the collection target has been lowered from
Rs. 2,475 billion to Rs. 2,275 billion. The federal target for next year is Rs 2,810 billion, an
increase of 23.5% from the revised target.
Punjab largely depends on federal transfers from the divisible pool for its expenditure
plans. Any short fall in collection at the federal level has a direct impact on the revenue receipts of
the province. Such a situation requires expenditure controls and is detrimental to development
planning. The classical approach is of cautious financial management with an eye on cash
balance. The situation is compounded by the fact the provinces cannot borrow to meet deficits
which may arise in a situation of volatile revenue transfers. Despite these financial constraints,
Government of Punjab completed its priority development projects without any delay.
The Government of Punjab has ambitious plans for spurring economic growth, providing
quality public services, building infrastructure and protecting the vulnerable and marginalized of the
province. These objectives require revenue generation for meeting development and operational
expenses. Government of Punjab intends to generate revenue from provincial own resources
through better tax management, in particular plugging leakages, taxing untaxed areas and
rationalizing taxes in under taxed area. These measures would be complemented by tax payer
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Budget 2014-15
(ii)
Executive Summary
facilitation, reducing interface between the tax collector and the tax payer and promoting a culture
of tax payment and compliance. It also intends to recognize and encourage tax payers through
incentives and recognition. These revenue generation measures must be situated in the context of
income disparities and the incidence of poverty. Government of Punjab therefore believes in equity
and fair play in tax administration. Government of Punjabs tax reforms agenda is to implement an
efficient tax system with transitional losses and to bring the tax rates at reasonable level by under
taking broad based tax reforms and increasing the tax base rather than transferring further burden
on existing tax payers. E stamping, automation of properties through GIS mapping, elimination of
redundant taxes like Bed Tax etc. are some of the measures proposed for FY 2014-15.
Punjab Revenue Authority (PRA), created in July 2012, is primarily tasked to collect Sales
Tax on Services. The Authority has demonstrated promising potential of growth since its inception.
It continues to expand tax base with an aim to enter a negative tariff regime in the coming years.
More and more services are being brought into the tax net. The organization is building its capacity
so that it can expand coverage in the major urban centers in Punjab. Its organizational strength is
being further augmented through a range of subordinate legislation that will make PRA more
effective in increasing the provincial own source revenues. Apart from PRA, government is also
focused on improving the tax collection of Excise & Taxation Department and Board of Revenue.
Without much addition in new taxes, both the organisations have planned to improve their
collection by plugging the leakages through automation and computerization of their tax collection
regimes. In case of non-tax levies, the existing rates which were levied more than five years ago,
have been revised upwards. However, adequate safeguards have been placed for economically
vulnerable.
Finance Act 2014 further brings a number of changes in the existing regimes of revenue
collection. It provides for imposition of luxury tax on palatial houses and luxury vehicles. A number
of changes have been incorporated in Punjab Sales Tax on Services to rationalize and bring
harmony in the existing Sales Tax regime. A separate legislation is also being introduced to impose
Punjab Infrastructure Development Cess. This tax will be levied on goods destined for export or
imported and passing through the limits of the province of Punjab.
On the expenditure side, Punjab Government remains fully committed to curtailing
avoidable expenditures and to allocate more resources for health and education & infrastructure.
Current Revenue allocations in FY 2014-15 for Health & Education have been increased
significantly.
Punjabs Development Budget has been formulated to trigger economic growth which
would achieve the target of 8% by 2017-18. It focuses on growth that is sustainable and has the
capacity to transform the socio-economic status of its citizens. The Development Budget is geared
towards creating jobs and generating private investment. The poor and vulnerable of a society
often do not benefit from the growth and investments. This segment needs special attention and
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Budget 2014-15
Executive Summary
(iii)
hand holding to protect and help them participate in social and economic life. Government of
Punjab invests in social protection and welfare for such members of the communities. A number of
pro-poor initiatives such as the Punjab Education Endowment Fund, subsidy on public transport
and agriculture inputs, provision of free text books and stipends to girl students, availability of
sufficient free medicines in hospitals and many other such interventions have been planned and
adequately budgeted in the next financial year.
Energy shortage has plagued the economy and hampers it from realizing its full potential.
It has not only stinted the growth of economy, but has also brought miseries for ordinary citizens
who are unable to continue livelihoods and businesses. Government of Punjab has taken a number
of initiatives to combat the energy crises. The establishment of Quaid-e-Azam Solar Park in
Cholistan Bahawapur is a reflection of the resolve of the government to deal with power crises.
Earmarking of sites for coal fired power plants in the province and exploitation of indigenous fuels
such as biomass and biogas are part of Government of Punjabs priorities. Development budget
2014-15 includes a sizable allocation for energy related projects.
In recent times, Pension Management has remained a center of focus not only among the
developed countries but also for developing countries. Punjab is the largest province of the country
having approximately one million employees and 436,995 pensioners. In conformity with the global
trend, Government of Punjab initiated a number of pension reforms in last few years. A dedicated
corporate entity, Punjab Pension Fund has been established through enactment by Punjab
Provincial Assembly to enhance the Fund size to meet the liabilities of Pension through prudent
investments. Further, Government has also taken various measures for facilitating pensioners in
pension disbursement.
Despite limited resources and severe economic crises, Government of Punjab through
better administrative and fiscal management has managed to keep its debt at manageable level.
Government of Punjab has a small debt liability compared to size of Gross Regional Product of the
province. At end of June-2014, the Punjabs total debt was Rs. 452 billion, or 3.52% of provinces
economy.
Another window of opportunity is the interest of private sector in building public private
partnership through which not only would the private sector would accrue profits but efficiency gain
would be achieved through leveraging of public assets and investments too. Government of Punjab
is keenly looking to work in cooperation with private sector to utilize the provinces resources more
efficiently.
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(iv)
Executive Summary
EXPENDITURE
BE
2014-15
BE
2014-15
Description
Revenue Expenditure
699,951.083
804,195.607
392,445.112
164,680.244
113,218.426
64,197.368
Economic Affairs
71,759.186
23,590.386
Environment Protection
29,589.982
15,129.467
Federal Grants
11,017.000
Health
53,745.852
139.704
2,332.603
46,712.078
Social Protection
B - General Capital Receipts
Capital Receipts
Recoveries of Loans and Advances (A/C-I)
Debt (A/C-I)
4,468.655
Capital Expenditure
304,453.122
Public Debt
0.434
Repayment of Principal
21,618.211
134,111.115
Investments
14,960.832
120,169.258
13,556.444
36.828
152,947.258
101,333.115
C - Development Receipts
Foreign Project Assistance
C - Development Expenditure
37,712.420
290,000.000
1,095,123.832
Special Initiatives
Total Expenditure A/C-I
254,280.373
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1,349,404.205
345,000.000
40,000.000
15,000.000
1,095,123.832
254,280.373
1,349,404.205
Budget 2014-15
Executive Summary
(v)
BUDGET AT A GLANCE
(Rs. in Million)
CLASSIFICATION
BE 2013-14
RE 2013-14
BE 2014-15
871,953.317
845,169.177
1,033,073.219
Current Expenditures
607,569.311
584,670.278
699,951.083
264,384.006
260,498.899
333,122.136
17,661.259
20,166.230
24,338.193
51,745.265
55,527.854
50,172.749
(34,084.006)
(35,361.624)
(25,834.556)
230,300.000
225,137.275
307,287.580
29,700.000
33,712.310
37,712.420
Operational Shortfall
30,000.000
(34,734.991)
--
290,000.000
224,114.594
345,000.000
Development Programme
290,000.000
224,114.594
345,000.000
240,000.000
197,414.594
290,000.000
50,000.000
26,700.000
40,000.000
15,000.000
A- CURRENT BUDGET
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Chapter 1
ESTIMATES OF RECEIPTS
1.
The following flow chart provides various sub-categories of the receipts leading to the two
major heads of receipts mentioned above.
Figure 1.1
Flow chart of modes of financing
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million for the FY 2014-15 as compared to Rs. 919,314.576 million for BE 2013-14. The increase in
estimates of General Revenue Receipts for FY 2014-15 is mainly attributable to expected increase
of 14.5% in the Federal Divisible Pool.
Federal Divisible Pool share is estimated to be Rs.804,195.607 million in FY2014-15,
compared to budget estimate of Rs. 702,120.646 million in FY 2013-14, assuming a growth in tax
collection of FBR by 23.5% from the RE 2013-14. Budgetary Estimates of Provincial Tax Receipts
for FY 2014-15 have been fixed at Rs. 164,680.244 million in comparison with Revised Estimates
of Rs. 111,788.994 million for FY 2013-14.
For non-tax receipts, an estimate of Rs. 64,197.368 million has been fixed for FY 2014-15
against budgetary estimates of Rs. 43,129.872 million in FY 2013-14. Table below summarises the
estimates of total Provincial Receipts of the Government.
Table 1.1
Total Provincial Receipts
(Rs. in Million)
RECEIPTS
BE 2013-14
RE 2013-14
BE 2014-15
871,953.317
845,169.177
1,033,073.219
702,120.646
126,702.799
43,129.872
650,390.499
111,788.994
82,989.684
804,195.607
164,680.244
64,197.368
308,260.893
308,187.030
316,330.986
385.325
4,369.842
2,498.359
Debt Foreign
State Trading - (A/c. No.II)
17,275.934
140,639.125
15,796.388
138,082.764
21,839.834
134,111.115
120,260.509
29,700.000
116,225.726
33,712.310
120,169.258
37,712.420
1,180,214.210
1,153,356.207
1,349,404.205
The definitions, composition and analysis of different types of receipts are given below: 1.1
Federal Transfers:
II)
Share of Federal Divisible Pool of Taxes as per the 7th National Finance
Commission (NFC) Award.
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Budget 2014-15
Straight Transfers as per Article 161 of the Constitution and NFC Award
with respect to royalties on Oil & Gas, and net proceeds of the Federal
excise duty on natural gas
Extraordinary Receipts
Table below shows the details of Budget Estimates and Revised Estimates for General
Revenue Receipts for FY 2013-14 in comparison with the anticipated Budget Estimates for FY
2014-15. Federal Grants and Straight Transfers that form part of provincial non-tax receipts in the
Annual Budget Statement (ABS) have been shown separately to furnish a clear picture of the
provincial non-tax collection of the Province.
Table 1.2
General Revenue Receipts
(Rs. in Million)
273,832.152
253,282.768
336,122.524
78,436.271
68,504.315
79,991.000
303,875.819
291,428.944
339,397.535
172.035
197.986
36,777.572
48,268.048
447.794
396.900
416.500
126,702.799
111,788.994
164,680.244
Board of Revenue
37,918.950
35,390.659
39,789.784
20,946.905
17,831.776
22,799.960
538.426
531.112
550.000
Finance
62,350.000
52,000.000
95,000.000
Energy
4,948.518
6,035.447
6,540.500
28,707.386
23,434.955
44,590.386
5,483.844
637.162
21,361.469
7,776.705
7,261.834
8,759.188
15,446.837
15,535.959
14,469.729
Straight Transfers
6,606.242
8,602.334
8,589.982
2,830.426
4,808.327
2,907.337
1,530.848
1,505.984
1,736.049
2,244.968
2,288.023
3,946.596
Miscellaneous Receipts
d
BE 2014-15
804,195.607
--
Transport
RE 2013-14
650,390.499
45,528.610
Federal Excise
BE 2013-14
702,120.646
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Budget 2014-15
BE 2013-14
7,816.244
RE 2013-14
50,952.395
BE 2014-15
11,017.000
3,231.145
15,294.499
--
--
24,153.270
--
4,585.099
11,504.626
11,017.000
43,129.872
82,989.684
64,197.368
871,953.317
845,169.177
1,033,073.219
As depicted in Table above, the General Revenue Receipts for FY 2013-14 were
estimated at Rs. 871,953.317 million, which subsequently decreased by Rs. 26,784.140 million on
account of 8.7% less receipts of Federal Divisible Pool Taxes from the anticipated amount of tax
collection by FBR. However, for FY 2014-15, the estimates of General Revenue Receipts have
been pitched at Rs. 1,033,073.219 million. This increase is projected on the basis of FBR collection
estimates of Rs.2,810 billion during FY 2014-15.
It is evident from the above table that major source of revenue for the Provincial
Government is Federal Divisible Pool share receipt in lieu of the Federal Transfers. This is primarily
because of the structure of fiscal federalism which allocates almost all buoyant taxes such as
income tax, sales tax on goods, customs and excise duties to the Federation.
Figure below reflects the share of components of the General Revenue Receipts:
Figure 1.2
General Revenue Receipts BE 2014-15
Heavy dependence on Divisible Pool Transfers implies that in case of a small (say 5%)
shortfall in FBR revenue collection, the provincial government has to make major adjustments in its
expenditures.
Figure further provides a comparison of budget estimates of different components of
General Revenue Receipts for FY 2013-14 and 2014-15.
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Budget 2014-15
Figure 1.3
General Revenue Receipts BE 2013-14Vs. 2014-15
1.1.2
The second component that constitutes the General Revenue Receipts is Provincial
Revenue Receipt including:
a)
Tax Receipts
i. Receipts from Direct Taxes:
Property Tax
Land Revenue
Professional Tax
b)
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Provincial Excise
Stamp Duties
Electricity Duty
Non-Tax Receipts
i)
ii)
iii)
RECEIPTS
BE2013-14
RE2013-14
BE2014-15
a) Tax Receipts
126,702.799
111,788.994
164,680.244
i. Direct Taxes
31,076.815
27,352.523
29,700.881
95,625.984
84,436.471
134,979.363
b) Non-Tax Receipts
43,129.872
82,989.684
64,197.368
5,483.844
637.162
21,361.469
7,776.705
7,261.834
8,759.188
15,446.837
15,535.959
14,469.729
7,816.244
50,952.395
11,017.000
v. Straight Transfers
6,606.242
8,602.334
8,589.982
169,832.671
194,778.678
228,877.612
I. Tax Receipts
There are 5 departments for the collection of Provincial Tax Receipts.
1) Board of Revenue
2) Excise & Taxation
3) Finance Department/Punjab Revenue Authority
4) Energy
5) Transport
The details of taxes collected in FY 2013-14 & the BE for 2014-15 are provided below:
Table 1.4
Provincial Tax Receipts
TAX RECEIPTS
Board of Revenue
Agricultural Income Tax
Registration
Land Revenue
Capital Value Tax
Stamps
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(Rs. in Million)
BE 2014-15
39,789.784
2,018.938
BE 2013-14
37,918.950
2,018.938
RE 2013-14
35,390.659
830.000
4,680.457
4,640.866
1,612.271
11,583.643
11,036.299
11,788.682
4,938.755
4,938.755
5,432.631
14,697.157
13,944.739
18,937.262
Budget 2014-15
TAX RECEIPTS
Excise & Taxation
Urban Immovable Property Tax
Tax on Professions, Trades and Callings
Opium
Receipts under MV Acts
CVT on Moveable Assets
Provincial Excise
Farm house tax
Tax on Luxury Houses
Other Indirect Taxes
Transport
Motor Vehicles fitness certificate and permit fee
Finance
Sales Tax on Services
Energy
Electricity Duty
Total Provincial Tax Revenue
7
BE 2013-14
20,946.905
7,254.663
RE 2013-14
17,831.776
5,278.268
BE 2014-15
22,799.960
7,750.000
583.359
583.359
583.359
6.886
0.050
0.050
10,100.117
9,361.643
11,255.341
0.000
101.352
200.002
1,782.608
1,500.000
1,782.608
17.000
0.536
15.000
0.000
44.440
500.00
1,202.272
538.426
538.426
62,350.000
62,350.000
4,948.518
4,948.518
962.128
531.112
531.112
52,000.000
52,000.000
6,035.447
6,035.447
713.600
550.000
550.000
95,000.000
95,000.000
6,540.500
6,540.500
126,702.799
111,788.994
164,680.244
The above table shows that tax collection by the government during FY 2014-15 is
pitched at Rs.164,680.244 million as compared to RE 2013-14 of Rs.111,788.994 million. In this
way government expects to increase its tax collection by 47% from the Revised Estimates. The
government has however taken necessary steps including expansion in scope of different taxes
and improving collection efficiency with measures like e-stamping, automation of property tax
record through GIS mapping of properties, plugging of revenue leakages and simplification of
procedures.
The shortfall seen in the revised estimates for FY 2013-14 as against the Budgetary
Estimates for FY 2013-14 can be attributed to shortfall in Board of Revenue with respect to AIT
which remained less than 143% from the BE 2013-14. The same was the case with respect to
Stamp Duty collection which remained 5.4% less than BE 2013-14. It is hoped that with the
implementation of E-Stamping the Board of Revenue would be able to give a growth of 28.8% in
Stamp Duty collection. The UIPT collection remained 36.6% less than the budgetary estimates
however, with the new valuation tables coming into force in the next financial year, the same would
be augmented by 13.7% from the last year. The Sales Tax on Services is clearly indicating that it
will in future make unprecedented achievements increasing revenue income of the province.
However, there is still a lot of potential to be tapped from this tax by extending its base and
increasing efficiency of collection. At present the tax is being collected from 37 different categories
of services. The government intends to include 10 more services in the next financial year in a bid
to realize the full potential of this tax. The government in order to plug compliance gap arising out
of the diversified interpretation of the service tax tariff has further rationalized the description so
that tax evasion could be minimized.
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Budget 2014-15
Board of Revenue has been assigned collection of Agriculture Income Tax, Registration
Duty, Land Revenue, Capital Value Tax & Stamp Duty. Its contribution in the overall tax receipts of
Province is projected to increase from Rs.37,918.950 million for FY 2013-14 to Rs. 39,789.784
million in FY 2014-15. The following measures are underway for increased resource mobilization
efforts by BOR:
For the purpose of clarity the major tax heads under BORs preview are elaborated upon
as follows:
a) Agricultural Income Tax
Agricultural Income Tax (AIT) is an important direct tax available to provinces. AIT Act
was promulgated in 1997. It envisaged payment of fixed amount per acre of land. Major
amendments were introduced to this Act in 2001 and whereby holders of 25 acre irrigated land
(equivalent to 50 acre un-irrigated land) were required to submit their AIT return. The income mode
of the tax was, however, not practically implemented due to capacity related issues of the
collectors in the field. The collection of tax, however, continued in the fixed mode and owing to the
sub-division of land over-time into smaller holdings, and exemption to owners of up to 12.5 acres,
the collection from this tax has been declining in recent times.
b) Land Revenue
Land Revenue is a broad category, and includes a number of receipts related to Land
Revenue functions. This category of Provincial Tax Receipt has a lot of potential and it is expected
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10
a)
The UIPT is essentially a devolved tax, but for administrative convenience it is being
collected by the Provincial Government and passed on to the respective TMAs as per the agreed
distribution. The UIPT for FY 2014-15 stands at Rs. 7,750.000 million which is 6.8% higher than BE
2013-14.
The government has completed automation of property tax record through GIS mapping
of properties in five major districts. The revised valuation tables with a 50% enhancement in rental
rates and a further reduction in UIPT rates to 5% would be enforceable in FY 2014-15. This would
not only improve the under-taxation of properties but would be beneficial in documenting occupied
excess properties.
The tax demand would be facilitated through a property tax calculator whereby tax-payers
would be able to generate their own UIPT demand and avoid interface with the tax collectors. In
view of the above measures, the proceeds of this tax are likely to undergo a significant increase.
b)
In order to tax luxurious lifestyle the government has levied a tax on luxurious and palatial
houses from the owners, occupant or transferee of a residential house notified areas.
c)
Professional Tax
The B.E for FY2014-15 with respect to professional tax have been pitched at Rs. 583.359
million. The contribution of professional Tax is not huge, but being a direct tax, it has good potential
in the long term.
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11
or were failing to discharge tax liabilities in respect of the taxable component of their main business
activities. Inclusion of these new services will also further bring equity in the Punjab sales tax base
and also harmonize the service tax system of Punjab with other provinces.
In view of the above, the budgetary estimates 2014-15 for PRA has been pitched at
Rs.95,000.000 million as against Rs. 62,350.000 million for FY 2013-14 which is 52.4% higher than
last year owing to the still untapped potential in the sales tax net.
II.
Non-Tax Revenue
BE 2013-14
RE 2013-14
BE 2014-15
5,483.844
637.162
21,361.469
5,117.000
--
21,000.000
157.120
102.106
157.120
147.000
472.749
--
59.056
56.343
198.477
0.668
0.459
0.459
3.000
5.413
5.413
--
0.092
--
7,776.705
7,261.834
8,759.188
Fiscal Administration
Law and Order
Justice
Police Department
Jails including Civil Defence
Community Services
Communications & Works
Public Health
Social Services
Education
Health
Housing and Physical Planning
102.881
3,458.757
102.881
3,482.609
102.881
4,114.925
282.069
3,075.001
101.687
296.381
297.055
3,096.298
89.930
3,703.585
114.285
2,156.334
1,576.467
2,244.645
2,105.706
50.628
1,541.177
35.290
2,206.645
38.000
1,525.611
1,667.777
1,711.637
995.692
529.919
1,099.654
1,124.367
568.123
587.270
533.122
432.100
585.100
Dividends
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12
Miscellaneous Receipts
Agriculture
Board of Revenue
Fisheries
Forest & Wildlife
L&DD
Cooperative
Irrigation
Industries
Mines & Minerals
Home
Misc.
Federal / Foreign Grants
Straight Transfers
TOTAL NON-TAX RECEIPTS
29,869.323
755.909
4,153.544
225.285
1,105.144
802.748
8.225
2,761.552
103.122
4,205.064
716.171
610.073
7,816.244
6,606.242
75,090.688
624.618
329.233
205.867
1,356.508
716.302
2.415
1,610.029
145.176
2,500.000
642.353
7,403.458
50,952.395
8,602.334
34,076.711
771.705
2,576.629
229.000
1,413.766
820.102
3.567
3,099.035
160.786
3,500.000
730.000
1,165.139
11,017.000
8,589.982
43,129.872
82,989.684
64,197.368
Figure 1.6
Provincial Non-Tax Receipt BE 2014-15
A.
From the table above, it is clear that this component of the non-tax revenue is an
important part of Non-Tax Revenue for the province.
The Income from property and enterprises comprises of two components.
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b. Interest on loans
Punjab Government extends loans to local governments, financial institutions and
autonomous bodies under its purview for meeting their current and development
expenditures. The interest from these loans is another important part of receipts of
Income from Property and Enterprises. Interest amounting to Rs. 366.844 million was
received during FY 2013-14 and the interest income for FY 2014-15 has been pitched at
Rs. 361.469 million. It may be pertinent to mention here that after the issuance of right
shares against subscription money of Rs. 10,000.000 million by Bank of Punjab the
interest payments to Government of Punjab would not be available in FY 2014-15. Hence,
the interest income during next financial year is expected to be considerably lower than
FY 2013-14.
Figure 1.7
Income from Property and Enterprises BE 2014-15
B.
These receipts generally accrue from the regulatory and administrative functions of the
Government and pension contribution on behalf of provincial civil servants working in autonomous
bodies etc. Government is expected to collect Rs. 8,759.188 million during FY 2014-15 from these
sources of revenue. A break-up of these receipts is graphically elaborated below:
Figure 1.8
Civil Administration and other Functions BE 2013-14 vs. BE 2014-15
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b) Community Services
The major source of income in this classification are receipts accruing from toll collection
on provincial roads and bridges and through rent of Government buildings. The toll collection is
expected to grow due to revision of toll tax rates. Moreover, with the inclusion of newly constructed
provincial roads, the receipts with respect to toll on Roads & Bridges would substantially increase
in FY 2014-15.
Figure below elaborates the break-up percentage contribution of each component of the
total community service receipts estimated for FY 2014-15.
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Figure 1.10
Community Services BE 2014-15
c) Social Services
These receipts include general administration receipts realized through different economic
regulations, examination fee realized by Punjab Public Service Commission, receipts and revenues
under regulations on weights and measures, trades etc. The BE for FY 2014-15 has been set at
Rs.1,711.637 million which is 12.2% higher than the BE 2013-14.
Figure 1.11
Social Services BE 2014-15
C.
Under the receipts from economic functions, revenue on account of Abiana (water rate for
irrigation), receipts from renting out of agricultural machinery / equipment, sale of forest timber etc.
are included. In the general category, other receipts such as small fees / charges on account of
regulatory functions of the Government are included. Similarly, major receipts such as those
accruing from arms licence fee and royalty from mines and minerals are also included under this
classification as show in the following pie chart.
Figure 1.12
Miscellaneous Receipts BE 2014-15
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Under Miscellaneous Receipts, the important constituents include receipts from Forest,
Wildlife & Fisheries, Irrigation and Mines & Minerals. The budgetary estimates for FY 2014-15 has
been pitched at Rs. 34,076.711 million which is 14% higher than the BE 2013-14.
Another significant non-tax potential is that of Punjab Privatization Board. BE 2014-15 of
Rs.2,576.629 million has been set that includes an estimate of Rs. 2,000.000 million through sale of
properties by Punjab Privatization Board.
a) Straight Transfers
Under Article 161 of the Constitution and the NFC Award, Straight Transfers to the
provinces include:
i)
ii)
Net proceeds of royalty on crude oil and natural gas assigned to the provinces
under the Constitution.
Straight Transfers are reflected under the non-tax provincial receipts, yet for the purpose
of clarity, the same have been shown separately under the Federal Transfers in this chapter. The
Budget Estimates for FY 2014-15 have been pitched at Rs. 8,589.982 million against
Rs. 6,606.242 million for BE2013-14.
Figure 1.13
Composition of Straight Transfers BE 2014-15
b) Federal Grants
Federal Grants, both Development and Non Development, comprise of public sector
development programs (PSDP), grants from federal government as well as budget support grants
received from foreign development partners. The federal PSDP grants are only pass through items.
These grants are released to executing agencies for implementation of Federal Development
Projects. Therefore, the estimates of PSDP grants are only made part of the revised estimates.
The RE for FY 2013-14 for PSDP grants is Rs.39,447.769 million against budget estimates of
Rs.3,231.145 million.
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Table 1.6
Federal / Foreign Grants
(Rs. in Million)
Sr. No.
Particulars
BE 2013-14
RE 2013-14
BE 2014-15
1.
DFID Grants
3,459.099
10,074.015
9,580.000
2.
1,126.000
1,430.611
1,437.000
3,231.145
39,447.769
--
7,816.244
50,952.395
11,017.000
Total Grants
Revised Estimates for FY 2013-14 of Foreign Grants are higher than the budget estimates
for FY 2013-14 on account of anticipated DFID program grants for Punjab Education Sector
Project-II (PESP-II) and Punjab Health and Nutrition Program (PHNP). DFID has provided 30
million as frontloading in respect of PESP-II in FY 2013-14. The BE for FY 2014-15 for Foreign
multilateral grants projects specific grants are pitched at Rs. 1,437.000 million, as against the
Budgetary Estimates for FY 2013-14 of Rs. 1,126.000 million.
The Table below provides the break-up of Foreign Grants.
Table 1.7
DFID Grants
Sr. No.
Particulars
1.
2.
BE 2013-14
(Rs. in Million)
RE 2013-14
BE 2014-15
2,830.172
9,428.009
5,455.000
628.927
646.006
4,125.000
3,459.099
10,074.015
9,580.000
The table below provides the break-up of Foreign multi lateral grants:
Table 1.8
Foreign multi lateral grants (mainly JICA)
(Rs. in Million)
Sr.
No.
Particulars
1.
BE
2013-14
RE
2013-14
BE
2014-15
25.000
--
5.000
2.
Australia-Optimizing
Canal
and
groundwater
Management to assist Water User Association in
Maximizing Crop Production and Management
Salinisation with Australia Assistance
1.000
0.611
2.000
3.
100.000
--
--
4.
1,000.000
1,430.000
1,430.000
1,126.000
1,430.611
1,437.000
Total Grant
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1.2
Current Capital Receipts mainly accrue from new loans borrowed or raised by the
Provincial Government and recoveries of loans which were granted to provincial establishments or
their employees.
Current Capital Receipts may be credited either to the Provincial Governments Account
No. I (Non-Food Account) or Account No. II (Food Account), depending on the nature of the
receipt. Money raised through loans, budgetary support programme of multilaterals, recoveries of
principal amount of loans advanced by the Government to its employees and autonomous bodies
are credited to Current Capital Receipts (Account No.I). On the other hand, receipts from sale of
wheat and financing for procurement of wheat accrue to Account No. II.
Current Capital Receipts figures for FY 2013-14 and FY 2014-15 are presented in Table
below.
Table 1.9
Current Capital Receipts
RECEIPTS
BE
2013-14
(Rs. in Million)
BE
2014-15
RE
2013-14
385.325
4,369.842
2,498.359
105.708
75.000
112.710
--
3,902.677
1,500.000
234.741
350.063
843.546
44.739
41.924
41.925
0.137
0.178
0.178
17,275.934
15,796.388
21,839.834
0.434
0.035
0.434
--
--
--
Recovery of Investment
--
--
--
17,275.500
15796.353
21,839.400
17,661.259
20,166.230
24,338.193
140,639.125
138,082.764
134,111.115
120,260.509
116,225.726
120,169.258
Account No. II
260,899.634
254,308.490
254,280.373
278,560.893
274,474.720
278,618.566
Permanent Debt-Foreign
Account No. I (a) + (b)
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and Rs. 843.546 million from agencies like Punjab Small Industries Corporation and Sui Northern
Gas Pipelines Limited etc.
It will be useful to provide a synopsis of the more significant items categorised under
Recoveries of Loans and Advances.
Figure 1.14
Recoveries of Loans and Advances BE 2014-15
Foreign Project Assistance may be termed as ADP financing items which comprise of
loans borrowed from multilateral donor agencies through the Federal Government for specific
foreign-assisted development projects. The Budget Estimates for FY 2014-15 for Foreign Project
Assistance are pitched at Rs. 37,712.420 million compared to Budget Estimates 2013-14 of
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Particulars
IDA-4258-Pak Land Records Management
Information System Project.
IDA-5081-Pak Punjab Irrigated Agriculture
Improvement Program Project (PIPIPP)
JBIC-PK-P53 Rehabilitating Lower Chanab Canal
System (Part B)
IBRD-7380-Pak Punjab Municipal Services
Improvement Project (Including Sustainable
Development of Walled City Lahore)
OFID-1134-Pak Establishment of Govt. Institute of
Emerging Technologies, Raiwind Road, Lahore.
ADB-2300-Pak Punjab Irrigated Agriculture
Improvement Project
ADB-2299-Pak (PIAIP) Lower Bari Doab Canal
Improvement Project
JBIC-PK-P59 Punjab Irrigation System Improvement
Project
IBRD-7900-Punjab Barrages Improvement Phase-II
Project (Jinnah Barrage)
ADB-2286-Pak Renewable Energy Development
Sector Investment Program
ADB-2287-Pak Renewable Energy Development
Sector Investment Program
France/VINCI-Extension of Water Resource for
Faisalabad City Phase-I
IFAD-625-PK- Southern Punjab Poverty Alleviation
Project
2841-New Khanki Barrage Construction Project
Lahore Water Supply, Sewerage & Drainage
Improvement Project
2971-Pak-Pakpattan Canal & Sulemanki Barrages
Improvement Projects
IDA-4258-Pak Land Record Management
Information System Project (Additional Financing)
IFAD Livestock and Access to Market Project
Rehabilitation and upgradation of Trimmu Barrage &
Panjnad head works
Total Loans
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BE
2013-14
RE
2013-14
BE
2014-15
892.846
890.000
--
4,500.000
4,500.000
4,670.000
900.000
1,000.000
1,900.000
41.000
74.552
--
191.000
244.188
34.020
160.000
159.690
300.000
5,000.000
4,999.540
5,000.000
3,000.000
3,708.820
3,270.000
3,400.000
3,563.520
3,750.000
2,580.000
1,800.000
4,300.000
20.000
--
30.000
400.000
2,004.000
908.400
900.000
550.000
1,350.000
3,500.000
7,500.000
6,000.000
20.000
--
--
750.000
750.000
1,500.000
3,445.154
1,968.000
3,600.000
--
--
1,000.000
--
--
100.000
29,700.000
33,712.310
37,712.420
Budget 2014-15
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Chapter 2
ESTIMATES OF EXPENDITURE
OVERVIEW OF EXPENDITURE
The Punjab Government in the past few years has shown great commitment towards
service delivery through asset creation. It was befitting thus that a simultaneous strategy to
consolidate these assets was under taken timely. The Government, therefore, is tuned to
consolidate its assets and leverage them to gain efficiencies. With this view enhanced allocation
have been made in the Current Budget so that the infrastructure created through Development
Budget is optimally and efficiently leveraged to gain value for money. The Budget 2014-15 has
placed more resources in the service delivery areas, whereby, a common citizen would be able to
benefit from better roads, functional hospitals, thriving schools and all other amenities of public
use. The Annual Development Programme is 33% of the total outlay.
2.1
The budgetary framework broadly represents the total receipts of Provincial Government,
which comprises Federal Transfers and Provincial Own Receipts, and Total Expenditure. After
accommodating the demands of current revenue expenditure and current capital expenditure, the
net surplus is available for financing the Development Expenditure, which is also financed directly
through foreign aided projects. The framework of provincial budget is depicted below at Figure 2.1.
Figure 2.1
Budgetary Framework
Macro-Economic Projections
Federal Transfers
Recurrent impact of
Development
Expenditure
General Revenue
Receipts
Current
Expenditure
Development Expenditure
Revenue
Surplus
The provincial budget allocation tends to strike a balance between the competing
demands of current and development expenditure. Without compromising on essential areas of
current and capital expenditure, the provincial budget bids to ensure maximum surplus for
Development Expenditure. Overall expenditures of the government are classified under Provincial
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Consolidated Fund and Public Account of the province pursuant to the Article 118 of the
Constitution of Islamic Republic of Pakistan. Components of Provincial Consolidated Fund are
represented in the Figure 2.2.
Figure 2.2
Expenditure Classification
Expenditure
Public Account
Provincial
Consolidated Fund
PLAs
District
Provincial
Current
Revenue
Assignment
Account
Revenue
Deposits
Development
Land Acquisition
Capital
Revenue
Capital
GP Fund, GI, BF
Salary
Salary
Pension
Non
Salary
Construction
Cost
Securities
Non
Salary
Against the various components of expenditure, a comparison of allocations in year 2013-14 and
2014-15 is explained;
Table 2.1
Total Provincial Consolidated Fund
(Rs. in million)
CLASSIFICATION
BE 2013-14
RE 2013-14
BE 2014-15
607,569.311
584,670.278
699,951.083
312,644.899
309,836.344
304,453.122
170,705.637
153,460.881
216,595.841
119,294.363
70,653.713
128,404.159
1,210,214.210
1,118,621.216
1,349,404.205
These expenditures are charged on the Provincial Consolidated Fund and have been
discussed separately in the following paragraphs. The transactions on receipt and expenditure side
that are not part of the Provincial Consolidated Fund are explained separately in another Chapter
on Public Account.
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Current Revenue Expenditure depicts the operational and regulatory functions rendered
by provincial government departments for public service delivery. The Current Revenue
Expenditure for 2014-15 has been estimated to be at Rs. 699,951.083 million against the last year
allocation of Rs. 607,569.311 million.
The budgetary spread of the Current Revenue Expenditure is classified into 9 Functional
Heads. The classifications broadly define the areas of expenditure. A comparison of allocation
against various functions is tabulated below:
Table 2.2
Current Expenditure
(Rs. in million)
CLASSIFICATION
General Public Services (including transfers to
Local Governments)
Public Order & Safety Affairs
Economic Affairs
Environment Protection
Housing and Community Amenities
Health
Recreational, Culture and Religion
Education Affairs & Services
Social Protection
Total Current Expenditure
BE 2013-14
RE 2013-14
BE 2014-15
345,327.434
349,744.499
392,445.112
93,718.858
75,652.940
116.730
4,002.789
44,629.627
1,334.779
40,596.539
2,189.615
607,569.311
90,842.571
51,417.202
117.191
4,162.170
43,968.363
2,983.628
34,949.100
6,485.554
584,670.278
113,218.426
71,759.186
139.704
15,129.467
53,745.852
2,332.603
46,712.078
4,468.655
699,951.083
Figure 2.3
Current Revenue Expenditure 2014-15
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2.2.1
Table below shows the level of current expenditure under different functions for last four
years and budgetary allocations for FY 2014-15. It shows a continuous increase from
Rs.370,119.300 million to Rs.536,058.650 million in actual expenditure from 2010-11 to 2012-13.
The last few years have seen a substantial increase in allocations especially for education, health,
law & order and subsidies in the Public Service Delivery component of the Current Budget.
Table 2.3
Trends in Current Revenue Expenditure (Function Wise)
(Rs. in Million)
Actual
2010-11
Actual
2011-12
Actual
2012-13
RE 2013-14
BE 2014-15
209,603.600
261,398.911
308,772.100
349,744.499
392,445.112
63,144.200
73,548.248
83,900.388
90,842.571
113,218.426
Economic Affairs
38,369.100
46,211.614
57,019.828
51,417.202
71,759.186
72.400
93.372
83.126
117.191
139.704
1,901.200
2,951.465
5,557.759
4,162.170
15,129.467
19,709.200
27,142.130
34,610.952
43,968.363
53,745.852
866.700
1,243.197
2,164.883
2,983.628
2,332.603
26,200.600
27,674.762
37,740.356
34,949.100
46,712.078
Social Protection
10,252.300
4,035.887
6,209.258
6,485.554
4,468.655
370,119.300
444,299.586
536,058.650
584,670.278
699,951.083
FUNCTION
General Public Services
Environment Protection
Housing and Community Amenities
Health
Recreational, Culture and Religion
2.2.2
General Public Services includes primarily the expenditure on the provision of services
related to executive and legislative organs; and financial and fiscal affairs. The allocation for
general administration in this functional classification is pitched at Rs.392,445.112 million. This
includes an estimated expenditure of Rs. 104,000.000 million for pension payment against the last
year allocation of Rs. 74,935.253 million.
Allocations under General Public Services including the transfers to Local Governments
are shown in the Tables below:
Table 2.4
General Public Services
(Rs. in Million)
BE 2013-14
RE 2013-14
BE 2014-15
98,911.958
101,346.724
128,741.041
244,267.098
246,046.656
261,219.161
2,146.486
2,349.227
2,482.996
1.892
1.892
1.914
345,327.434
349,744.499
392,445.112
Budget 2014-15
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Figure 2.4
General Public Services
TRANSFERS (INTER-GOVERNMENTAL)
To District Government
To TMAs
To Union Administration
Cantonment Boards
Total
2.2.3
BE 2013-14
214,800.000
17,000.000
6,000.000
1,200.000
239,000.000
RE 2013-14
215,665.391
15,511.632
4,909.177
1,373.958
237,460.158
BE 2014-15
236,280.000
17,000.000
6,000.000
1,200.000
260,480.000
The allocation earmarked for Public Order and Safety Affairs for 2014-15 is
Rs.113,218.426 million as compare to Rs.93,718.858 million in FY 2013-14 showing a growth of
20.81% from last year. This allocation includes Rs.82,530.390 million for Punjab Police, that is
15.7% more than the allocation made in the last financial year. The allocation for all the formations,
especially the counter terrorism department, elite police force and district police have been
substantially enhanced to ensure preparedness of Police to provide better law and order to the
general public. The allocations under various sub-classification are tabulated below:
Table 2.6
Public Order and Safety Affairs
(Rs. in Million)
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BE 2013-14
10,500.564
71,305.410
57.611
5,839.796
6,015.477
93,718.858
RE 2013-14
9,672.657
70,180.353
49.488
6,032.152
4,907.921
BE 2014-15
11,473.988
82,530.390
59.220
7,469.520
11,685.308
90,842.571
113,218.426
Budget 2014-15
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Figure 2.5
Public Order and Safety Affairs BE 2014-15
2.2.4
Economic Affairs
C&W
Figure 2.6
Asset Consolidation R&M Allocation (C&W)
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Irrigation
Current Operational allocation increase from Rs 11.4 B to Rs. 15.3 B growth of 34%
Public Service Delivery allocations increased from Rs. 3.6 B to Rs.6.6 B growth of 81%
Figure 2.7
Asset Consolidation R&M Allocation (Irrigation)
ECONOMIC AFFAIRS
General Economic, Commercial & Labour Affairs
General Economic Affairs
Commercial Affairs
General Labour Affairs
Agriculture, Food, Irrigation, Forestry & Fishing
Agriculture
Irrigation
Land Reclamation
Forestry
Fishing
Food
Fuel and Energy
Administration
Mining and Manufacturing
Manufacturing
Mining
Construction and Transport
Road Transport
Construction (Works)
Other Industries
Tourism
Grand Total
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BE 2013-14
399.570
236.755
16.017
146.798
62,070.197
13,009.890
9,552.284
252.095
2,613.748
468.632
36,173.548
34.708
34.708
RE 2013-14
386.307
188.615
18.168
179.524
34,447.468
11,459.290
12,272.821
288.237
2,538.566
517.479
7,371.075
104.204
104.204
BE 2014-15
414.909
226.597
19.247
169.065
53,548.307
14,763.118
12,167.123
261.359
2,837.823
521.636
22,997.248
77.159
77.159
6,256.096
5,805.358
450.738
6,878.627
3,480.678
3,397.949
13.742
13.742
75,652.940
6,404.971
5,995.997
408.974
10,060.934
6,710.128
3,350.806
13.318
13.318
51,417.202
7,295.750
6,737.022
558.728
10,398.480
6,545.144
3,853.336
24.581
24.581
71,759.186
Budget 2014-15
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Figure 2.8
Economic Affairs Expenditure, BE 2014-15
2.2.5
This classification includes expenditure on Housing Urban Development & Public Health
Engineering Department, Environment Protection and Local Government and Community
Development Department. An allocation of Rs.15.129.467 million has been made under this
classification against the last years allocation of Rs. 4.002.789 million. General Revenue
Administration expenses has been pitched at Rs.122.318 million whereas the Public Service
Delivery allocation has been enhanced by 285.2% at Rs.15,007.149 million for FY 2014-15 from
Rs.3,895.956 million. Details of expenditure on Housing and Community Amenities are provided in
table below:
Table 2.8
Housing and Community Amenities
(Rs. in Million)
BE 2013-14
RE 2013-14
BE 2014-15
Housing Development
413.646
417.785
446.316
Community Development
586.680
472.708
4,558.057
3,002.463
3,271.677
10,125.094
4,002.789
4,162.170
15,129.467
Water Supply
Total
Figure 2.9
Housing and Community Amenities BE 2014-15
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Budget 2014-15
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The Budget 2014-15 includes an allocation for the newly established Parks & Horticulture
Authorities at Divisional Headquarters of Sahiwal, D.G Khan, Bahawalpur, Sargodha and
Gujranwala.
2.2.6
Health Services
Table 2.9
Health Services
(Rs. in Million)
HEALTH
Hospital Services
Public Health Services
Health Administration
Total
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BE 2013-14
RE 2013-14
BE 2014-15
42,902.728
38,918.279
48,039.911
138.726
119.786
135.135
1,588.173
4,930.298
5,570.806
44,629.627
43,968.363
53,745.852
Budget 2014-15
30
Figure 2.11
Health Services BE 2014-15
BE 2013-14
176.655
311.987
590.645
204.085
51.407
1,334.779
RE 2013-14
1,668.450
382.925
689.625
187.882
54.746
2,983.628
BE 2014-15
689.896
418.276
723.346
436.372
64.713
2,332.603
From the above table it is apparent that Cultural Services, Broadcasting and publishing
constitute a major expenditure under this classification. The allocation for Lahore Arts Council has
been enhanced by 118.61% in the non-salary component similarly 124% enhancements has been
made in the non-salary component for promotion of cultural activities 18.7%. Punjab Council of Arts
Lahores allocations have been enhanced by 114% in the non-salary component.
Figure 2.12
Recreational, Culture and Religion BE 2014-15
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Budget 2014-15
2.2.8
31
Education has continued to be the top priority of the government in its overall policy
framework for the socio-economic development of Punjab. The allocation for Education Affairs and
Services for the financial year 2014-15 has increased from Rs.40,596.539 million to Rs.46,712.078
million as against the outgoing financial year. The General Administration expenditure has been
reduced by 9.2% from last year and the Public Service Delivery allocation has been enhanced by
15.3% from the last financial year to the tune of Rs.46,357.287 million.
Table 2.11
Allocations for Departments under Education Affairs and Services
(Rs. in Million)
BE 2014-15
20,280.323
24,196.256
190.819
35.863
Growth in %
29.2%
6.6%
12%
31.3%
BE 2013-14
991.916
14,542.079
20,980.764
170.413
238.100
3,673.267
40,596.539
RE 2013-14
953.822
10,863.801
18,968.812
170.006
274.598
3,718.061
34,949.100
BE 2014-15
1,070.248
18,995.722
22,828.631
190.819
366.695
3,259.963
46,712.078
In the overall allocation of Education Affairs & Services shown in Table above, budgetary
provisions relating to Universities of Education, Health and Agriculture are also included.
Figure 2.13
Education Affairs & Services BE 2014-15
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The expenditure on the salaries and allowances of the staff in School Education are borne
by District Governments out of the funds transferred enbloc to them.
2.3
Budget Estimates for the FY 2014-15 are pitched at Rs.118,517.805 million against the
provision of Rs.89,979.055 million in FY 2013-14. Expenditures on Debt Servicing include payment
of interest on Foreign and Domestic Debt, General Provident Fund and interest on blocked loan of
Government of Punjab payable to State Bank of Pakistan. For Interest payments, an amount of
Rs.14,517.805 million has been provided in budget estimates 2014-15 against the budget
estimates of Rs.15,043.802 million in FY 2013-14. Decrease on this account is due to discharged
of interest liability pertaining to blocked account (medium term loan from State Bank of Pakistan).
Expenditure on Pension is pitched at Rs.104,000.000 million in FY2014-15 against the revised
estimate of Rs. 77,644.000 million.
The itemized allocations on this account are shown in Table below:
Table 2.13
Debt Management and Pensions
(Rs. in Million)
EXPENDITURE
Debt Management (Interest Payment)
BE 2013-14
RE 2013-14
BE 2014-15
15,043.802
14,516.100
14,517.805
Domestic Debt *
5,014.249
4,599.333
3,950.700
5,273.635
6,160.902
7,118.240
Foreign Loans
4,755.918
3,755.865
3,448.865
74,935.253
77,644.000
104,000.000
89,979.055
92,160.100
118,517.805
Pensions
Total
* Includes interest on domestic loans from federal government, market loans, floating debt, and other obligations
2.4
Current Capital Expenditure like current capital receipt figures both in the Account No. I
and Account No. II of the Provincial Government maintained with the State Bank of Pakistan.
Expenditure items under Current Capital Expenditure in Account No. I include the following:
(i) Principal Repayment of Domestic, Foreign and Market Debt.
(ii) Loans and advances to corporate bodies of the Government of Punjab or associated
with the Government of Punjab.
Expenditure in Account No.II are mainly incurred on state trading operations of the
government in food grains especially procurement of wheat and repayment of loans taken from the
commercial banks for trading operations of Food Department.
The details of the current capital expenditures are shown in Table below:
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Table 2.14
Current Capital Expenditure
(Rs. in Million)
BE 2013-14
RE 2013-14
BE 2014-15
Public Debt
0.434
0.035
0.434
0.434
0.035
0.434
21,457.221
21,060.190
21,618.211
4,160.381
4,160.381
4,264.263
17,196.840
16,899.809
17,253.948
100.000
--
100.000
Investments
8,147.592
8,147.592
14,960.832
8,147.592
8,147.592
14,960.832
22,107.443
26,294.972
13,556.444
6,175.000
6,175.000
--
5,302.095
5,302.095
--
10,530.348
14,817.877
13,546.444
100.000
--
10.000
32.575
25.065
36.828
51,745.265
55,527.854
50,172.749
260,899.634
254,308.490
254,280.373
148,581.069
142,829.313
152,947.258
112,318.565
111,479.177
101,333.115
312,644.899
309,836.344
304,453.122
Government Servants
State Trading in Medical Stores
Total Account No. I
The details of the current capital expenditures are represented in the chart below:
Figure 2.14
Current Capital Expenditure BE 2014-15
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The principle repayment of blocked account (Medium term loans from SBP) alongwith
loan to Bank of Punjab for its re-capitalization has been discharged and therefore no allocation has
been kept in the FY 2014-15 in this regard. Similarly, in order to fulfil the growing contingent liability
of Pension and General Provident Fund an ample amount to the tune of Rs.14,960.832 million has
been kept for the capitalization of both the Pension Fund as well as the General Provident Fund.
2.5
The expenditure under this grant pertains to expenses other than the brick and mortar
expense and includes employees related expense, purchase of transport, machinery and
equipment, operating expenses, research and development, training etc. provided under the
projects during the execution of the projects. Development Expenditure on Revenue account refers
to expenditure on proposed and ongoing projects/schemes which are being financed from normal
government operations and financial budgetary support through foreign multilateral grants.
2.6
Broadly, allocations in the Public Service Delivery for FY 2014-15 have the following
salient allocations:
Pay, allowances and pension have increased by 19.4% in 2014-15 against the last
year allocation.
Non-salary service delivery expenditure has been enhanced by 16.90% to the tune of
Rs.510,964.470 million from the last financial year.
Teacher Incentives for improved performance enhanced from Rs. 100.000 million to
Rs. 150.000 million
Non-salary budget for schools in 18 districts increased to Rs. 7,000.000 million, while
for remaining schools the allocation is Rs. 700.000 million to be spent under the
supervision of School Management Committees.
Allocation for Stipend to Girls Students Rs. 1,500.000 million in 15 low literacy
districts
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Expenditure on account of Public Order and Safety Affairs has been estimated at
Rs.113,218.426 million in FY 2014-15 against the budget estimate of Rs.90,842.571
million in FY 2013-14 showing an increase of 20.8% in comparison with the FY 201314. The additional allocation has been made primarily to supplement the emergent
needs of Law and Order, jails and administration of justice.
Allocation for Rescue 1122 (Punjab Emergency Service) Rs. 3,180.389 million.
The allocation for Police has been enhanced from Rs.70,180.353 million to
Rs.82,530.390 million. The budget for police is progressively being increased over
the last few years. Growth of 12.43% has been given in the allocations for police
training. Counter Terrorism Department allocations have been enhanced to
Rs.3,913.243 million with a growth of 156%. District police budget has been
enhanced to Rs.64,062.356 million from Rs.58,276.960 million with a growth of 9.9%.
Further a block allocation of Rs. 5,000.000 million has been made for the emergent
needs of Law & Order.
An allocation of Rs. 7,785.000 million has been made for provision of subsidy on
public transport and Ramzan package. An allocation of Rs. 22,785.000 million has
been made for subsidies and pro-poor initiatives in financial year 2014-15.
Allocation of Rs. 8,653.405 million has been made in FY 2014-15 for provision of free
medicines in public sector hospitals with a growth of 14.6% from last year.
Allocations for the Health Department have increased from Rs. 44,629.627 million in
FY 2013-14 to Rs.53,745.852 million in FY 2014-15 representing an increase of
20.43% over the budget estimates of FY 2013-14.
Figure 2.15
Health Service Delivery Allocations FY 2014-15
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14.8%
As a social protection initiative flood control / drainage has been given additional
allocation of Rs.2,737.434 million which is 87% higher than the last year.
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Chapter 3
PUBLIC ACCOUNT OF THE PROVINCE
3.1
INTRODUCTION
Public Account1 consists of those moneys for which the Provincial Government has a
statutory or other such obligation. These are in the form of trust money for which the Government
has a fiduciary responsibility. Public Account consists of series of accounts, each of which is
separately governed under specific rules framed for the said purpose. Main elements of the Public
Account in the Annual Budget Statement are summarized as follows:
Table 3.1
Public Account of the Province
(Rs. in Million)
BE 2013-14
RE 2013-14
BE 2014-15
(318,854.299)
(367,864.599)
(406,695.004)
(561.930)
(713.808)
(767.808)
(561.930)
(713.808)
(767.808)
(318,292.369)
(367,150.791)
(405,927.196)
Other Liabilities
(255,425.000)
(263,748.222)
(306,379.523)
Control Account
(34,589.389)
(9,894.500)
(19,114.637)
(19,387.440)
Trust Accounts-others
(18,195.474)
(57,758.602)
(17,698.821)
(33,318.346)
(24,606.362)
(25,878.090)
(1,459.049)
(1,922.968)
(1,993.933)
A:RECEIPTS
Assets
Cash and Bank Balances
Receivable
Other Assets
1 The Constitution of Pakistan stipulates 118. Provincial Consolidated Fund and Public Account.-(1) All revenues received by the
Provincial Government, all loans raised by that Government, and all moneys received by it in repayment of any loan, shall form part of a
consolidated fund, to be known as the Provincial Consolidated Fund. (2) All other moneys- (a) received by or on behalf of the Provincial
Government; or (b) received by or deposited with the High Court or any other Court established under the authority of the Province;
shall be credited to the Public Account of the Province.
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RECEIPTS AND DISBURSEMENTS
BE 2013-14
RE 2013-14
318,854.299
367,864.599
406,695.004
Receivables
318,854.299
367,864.599
406,695.004
239,868.200
274,930.555
302,891.287
11,921.025
16,157.256
16,921.920
53,166.530
58,013.935
60,029.350
9,098.544
13,962.853
14,480.042
4,800.000
4,800.000
12,372.405
--
--
--
B: DISBURSEMENTS
Current Assets
Liability
Current / Other Liabilities *
Control Account
BE 2014-15
3.2
RECEIPTS
3.2.1
ASSETS
Assets as Public Account receipts include cash and bank balances, investments, loans
and advances, imprest monies, advances to employees and returns from investments and loans
etc.
3.2.2
Deposits and Reserves constitute a major part of receipts of the Public Account. Deposits
and reserves include intergovernmental adjustments, remittances, suspense funds, special deposit
fund, welfare fund, development fund, education & training fund, Income Tax deductions from
salaries, Personal Ledger Accounts (PLAs) and most importantly, Trust Account Fund, comprising
the Provident, Benevolent and Insurance Fund receipts.
Deposits and reserves include a large number of items of miscellaneous receipts and
expenditure, most of which do not follow any particular pattern. This is especially true of receipts
and expenditures pertaining to personal ledger accounts of autonomous and local bodies of the
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Provincial Government, which are kept with Government treasuries. This is also applicable to
receipts and expenditures pertaining to various suspense accounts. Whether net receipts from
suspense accounts will be positive or negative depends entirely on whether misclassification in
respect of receipts has been more than in respect of expenditure and vice versa. Therefore, for
purposes of budgeting, the net effect of such receipts and expenditure is assumed to be nil as
receipts and disbursement of equal size are shown on both sides of the account.
3.3
DISBURSEMENTS
3.3.1
CURRENT ASSETS
Outflows from Assets are included under the category of Current Assets which includes
cash, bank balances and receivables.
3.3.2
LIABILITY
Disbursements from Deposits and Reserves are indicated as liabilities. This is a contra
item to the deposits and reserves indicated on the receipt side.
In FY 2014-15, the Public Account is showing a nil balance. The practice of using Public
Account funds for financing budgetary expenditures has been abandoned since 2008-09.
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Chapter 4
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Gender mainstreaming
Effective security through better law & orders
At the same time, it must be mentioned that, in the first year of MTDF, it would not be
possible to include schemes in ADP only on the basis of the economic growth strategy as such an
approach would have left a number of ongoing schemes unfunded and wasted a large amount of
investment already made on the ongoing schemes. Therefore, some fiscal space has been given
to ensure that no wastage of public resources takes place and minimum compromise is made on
achieving economic growth objectives of the Province.
The size of Development Programme 2014-15 is pitched at Rs.345 billion which includes
Rs.290 billion for regular development programme and Rs.40 billion for other development
initiatives and Rs.15 billion for special initiatives. The important features and new initiatives
included in ADP 2014-15 are as follows:
Regional balance in allocation of resources with extra weight (36%) for 11 districts of
Southern Punjab
Adequate funding for foreign aided and mega projects
Continued focus on undertaking projects that can be completed within one / two
years to control throw forward
Allocation of Rs.119 billion for social sectors investments with major focus on
education (Rs.48 billion) and health (Rs.31 billion)
Continued strategic interventions in large cities to realize their potential as engines of
growth. Allocation of Rs.40.4 billion for Urban Development Sector including
allocation of Rs.10 billion each for Mass Transit System for Rawalpindi and Multan.
Enhanced allocation of Rs.35.5 billion for Irrigation Sector as compared to Rs.22
billion during 2013-14
Allocation of Rs.31 billion for investment in the energy sector to overcome power
shortages in the Province
Allocation of Rs.30 billion for Women Empowerment initiatives over and above the
combined expenditure as both male & females.
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Budget Estimates
2014-15
Sector
Social Sectors
119,436
Education
48,310
School Education
28,100
Higher Education
14,050
Special Education
800
2,400
2,960
31,070
17,118
Social Protection
1,800
Regional Planning
7,150
PVTC, TEVTA
3,000
LG&CD
3,488
7,500
Infrastructure Development
148,532
Roads
31,560
Irrigation
35,572
10
Energy
31,000
11
Public Buildings
12
Urban Development
Production Sectors
8,000
42,400
26,320
7,960
13
14
Agriculture
Cooperatives
15
Forestry
16
Wildlife
17
Fisheries
580
18
Food
940
19
Livestock
5,200
20
7,110
21
1,460
22
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100
980
1,000
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S.No.
Budget Estimates
2014-15
Sector
Services
9,493
23
Governance & IT
7,393
24
541
25
Transport
109
26
Emergency Service
1,450
Others
8,209
190
27
Environment
28
607
29
Archaeology
380
30
100
31
320
32
6,612
33,010
33
34
12,000
35
Special Initiatives
15,000
6,010
345,000
Note: Other Development Expenditures/ initiatives have also been included in the relevant sector
In the following paragraphs, performance of ADP for fiscal year ending 30th June 2014
have been discussed along with the proposed allocations for ADP for FY 2014-15. The size of the
provincial ADP was originally fixed at Rs.290 billion. Although resource availability for funding the
development budget improved during 2013-14 however, it fell short of projections made at the time
of formulation of budget estimates for FY 2013-14 leading to downward revision of Development
Program to the extent of Rs.224 billion.
For execution of development schemes, funds were released in four quarterly
installments during FY 2013-14. As per utilization status of development program during 11
months of FY 2013-14, an expenditure of Rs.162 billion has been reported against a release
of Rs.208 billion till end May, 2014. Based on this utilization trend, it is expected that by the
end of 2013-14 utilization will be approximately Rs.195 billion indicating a significant
improvement in the overall development expenditure.
The historical trend of the last seven years revised ADP allocation and utilization is given in the
following graph:
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Figure 4.1
Trend of ADP Allocation (Revised) and Utilization
2007-08 to 2013-14
During the year 2013-14, a total of 3584 schemes were implemented which include 1179
ongoing and 2405 new schemes during the year. Out of these 3584 schemes, 760 schemes were
completed during the year which represent almost 21% completion rate. Amongst the completed
schemes 634 were ongoing schemes from the previous years.
Sector-wise breakup of 760 completed schemes is depicted in the following pie-chart:
Figure 4.2
Schemes Completed during 2013-14
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Like the previous year, concrete efforts were made to minimize the throwforward of
ongoing ADP Schemes by weeding out unfeasible and slow moving schemes. Full funds were
provided to schemes with the completion target during FY 2013-14, particularly during the last
quarter. Provision of token allocation for new schemes has been discouraged. These interventions
have helped clean up current ADP portfolio and curtail the throwforward. However, due to initiation
of new projects under District Development Package / SPDP and funding of new schemes through
supplementary grants, throwforward is expected to increase from Rs.278 billion in 2013-14 to
Rs.366 billion in 2014-15. Still the throwforward to development budget ratio will decrease in FY
2014-15 compared to FY 2013-14.
The historical trend of revised core allocation and throwforward during the last 7 years is
given in the following graph:
Figure 4.3
Trend of ADP Allocation (Revised) and Throwforward
2007-08 to 2013-14
During the year, a special effort has been made to remove regional disparities by
providing equal opportunities of growth to less developed areas of Punjab including Southern
Punjab, Cholistan and the Barani areas. This includes enhanced flow of development resources
and sustainability of development momentum in the less privileged areas, creation of job
opportunities and mitigation of poverty of low income groups. The strategy includes increasing the
overall development allocation of 11 Districts of Southern Punjab from Rs.25.7 billion in 2008-09 to
Rs.93 billion in 2013-14 and launching of new south focused special development programs.
During 2013-14, a three year development programme has been initiated for uplift of Southern
Punjab. Under this programme 91 projects costing about Rs.19.0 billion have been started to
improve socio-economic conditions of these districts. These schemes pertain to Road, Health,
Water Supply & Sanitation, Education, Technical Education, Emergency and Irrigation sectors.
Another programme Punjab Economic Opportunities Programme (PEOP) funded jointly by
Government of Punjab & United Kingdoms Department for International Development (DFID) was
initiated in the districts of Bahawalnagar, Bahawalpur, Lodhran and Muzaffargarh during 2010-11.
Under this programme, 54,057 youth including 21,123 female trainees have been provided training
in various skills. This training has been provided by engaging private / public training providers
including technical training institutions and NGOs through a transparent process. This initiative has
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not only been instrumental in creating employment opportunities for poorest segments of the
project area but has also helped in developing the capacity and interest of private sector training
providers in Southern Punjab in particular and rest of the province in general. In addition, focus of
skill development strategy on funding of trainees marks a departure from the traditional approach
of investing in brick and mortar adopted by the public sector in the past.
International Fund for Agriculture Development (IFAD) has joined the efforts of
Government of the Punjab for maintaining regional balance and poverty alleviation by launching a
new project Southern Punjab Poverty Alleviation Project in the districts of Bahawalnagar,
Bahawalpur, Muzaffargarh and Rajanpur. The programme having a total outlay of Rs.4.1 billion will
provide support to 80,000 poorest of the poor families through asset creation, vocational training,
community projects and productivity enhancement in Agriculture and Livestock sectors. All these
interventions have been / will be helpful in removing regional disparities and increasing
employment / income generation opportunities for the poorest segments of the Punjabs
population.
Education
Priorities of education sector include 100% enrolments and retention at elementary
education level, gender parity, reduction of regional disparities, child friendly environment coupled
with provision of quality education. Policy is geared towards ensuring achievement of Millennium
Development Goals. In School Education Sector, following achievements were made during 201314:
931 High/Higher Secondary Schools were converted into Model Schools having
enrolment above 1000 from Class VI to Class X.
50 dangerous school buildings and 500 flood affected school buildings were reconstructed
and rehabilitated.
Merit scholarships amounting to Rs.99.900 million were provided to the talented students.
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200,000 vouchers have been provided through Education Voucher Scheme (EVS) to
households in the urban slums for the children in the age cohorts of 4-17 years.
Under New School Program (NSP), 417 schools are running in 36 districts of Punjab with
an enrollment of 70,000.
2,129 Foundation Assisted Schools are running in 36 districts of Punjab and 1.3 million
students are getting free education.
In School Education Sector, following major targets are fixed for FY 2014-15:
Provision of Missing Facilities (Boundary wall, Drinking Water, Furniture, Electricity, toilet
block & additional class rooms) in 15,000 schools in Punjab.
Up-Gradation of 100 Primary Schools and 100 Elementary Schools to next level.
Conversion of existing IT Labs on Solar Energy in 1200 High / Higher Secondary Schools
of Punjab.
Major targets fixed in Higher Education Sector for FY 2014-15 are as under:
Up Gradation of 10 Colleges.
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Computerized Braille Printing Press, Lahore & Training college for the teachers of Deaf
Gulberg II Lahore.
Major targets fixed in Special Education Sector for FY 2014-15 are as under:
Up-gradation of Govt. Special Education School for Hearing Impaired at D.G. Khan and
Mianwali from Secondary to Higher Secondary level.
Up- gradation of Govt. Special Education School for Hearing Impaired, Gujrat from Middle
to Secondary level.
Literacy Sector
Focus of Literacy Department is eradication of illiteracy through non-formal means in
adults and children of most vulnerable and neglected groups of society, providing them with
another chance to benefit from educational learning and knowledge dissemination and play their
role in socio-economic development of the Country.
In Literacy Sector, following achievements were made during 2013-14:
Campaign for Enhancement of literacy Project in four districts (Khushab, Khanewal,
D.G.Khan and M.B.Din) was completed in 2013-14. During project period 630 Non Formal
Education Schools were established and total of 22,988 learners were enrolled .
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Major targets fixed in Literacy Sector for year 2014-15 are as under:
Establishment of 667 Functional Literacy Centers in selected 36 Tehsils for more than 1
million adult illiterates.
Establishment of 1000 NFBES in 11 Southern Districts with low literacy rate for 30,000
learners.
Establishment of 12500 centers in collaboration with NGOs, CBOs, CSOs and unemployed youth, for 250,000 learners.
Crash Literacy program for youth, women and rural adults for attainment of MDGs targets.
Major targets fixed in Sports Sector for year 2014-15 are as under:
Construction of 5 Stadiums in Punjab (Lahore, Rahim yar Khan, Muridke, Kasur, Sialkot).
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During 2013-14, total development outlay for Health Sector was Rs.17.0 billion. Four new
medical colleges at Gujranwala, Sialkot, Sahiwal and D.G. Khan established in 2011-12 have been
operationalized in 2013-14. Funds amounting to Rs.1.5 billion were provided in ADP
2013-14 for developing infrastructure and labs in accordance with PMDC standards. Mega projects
like Purchase of Equipment for 400-Bedded Civil Hospital Affiliated with QAMC Bahawalpur
(Rs.1.1 billion), Establishment of Kidney Transplantation / Dialysis Unit, BV Hospital Bahawalpur
(Rs.0.59 billion), Provision of Lacking Facilities in Multan Institute of Cardiology, Multan (Rs.0.57
billion) and Nursing Health Care in Punjab in partnership with Fatima Memorial Hospital Lahore
(Rs.3.2 billion) have been completed. Furthermore additional facilities have been provided in
eighteen existing hospitals besides establishment of one new THQ Hospital. One RHC was
upgraded to THQ hospital during the year.
Considering the success of Chief Ministers Health Initiative for attainment of MDGs
efforts were made for provision of 24/7 Emergency Obstetrics & Newborn Care (EmONC) services
at selected RHCs of flood affected areas in Bhakkar, Mianwali, R.Y. Khan, Layyah, D.G. Khan,
Muzaffargarh and Rajanpur. Government of the Punjab has decided to replicate the model
throughout the province in a phased manner starting from 2013-14. During 2013-14, 16 districts
having poor health indicators were selected for implementation of EmONC services which will be
extended in remaining districts of the province during 2014-16.
Government of the Punjab has also made efforts to reduce the prevalence of malnutrition
among children, pregnant and lactating women. The preventive nutrition interventions are being
proposed in 2014-15 for all 36 districts. The problem of acute malnutrition is being addressed by
providing iron-folic acid tablets, zinc sulphate supplements, fortification of salt iodization,
distribution of Multi micro-nutrient powder sachet and vitamin supplements for 12 priority districts
and urban peripheries of 9 large districts of Punjab during 2014-15. Subsequently, phased
extension is being proposed in the remaining districts of the province.
Government of the Punjab has taken initiative to establish state of the art hospitals like
Pakistan Kidney and Liver Institute and Cancer Hospital at Lahore during 2014-15. Moreover,
Purchase of Mobile Health Units is also being proposed in 2014-15 to provide health care facilities
in far flung areas of Punjab.
In order to ensure quality of health care delivery in public and private sector, Punjab
Health Care Commission has been established. Detailed technical spadework has been completed
with technical assistance from DFID. Minimum service delivery standards for Tertiary Care
Hospitals, licensing protocols and governance mechanism have been developed. Health Care
Commission has hired its management team for starting the actual work of licensing and regulating
public and private health facilities in the province. Health sector strategy developed through a
consultative process has been approved by the Chief Minister. The strategy addresses all major
issues in health sector and suggests solutions. Reorientation of primary health care will be focused
under this strategy. World Bank & DFID have expressed interest to provide support in
implementation of strategy through Punjab Health Sector Reform Programme. An agreement has
been signed by Government of the Punjab with DFID whereby DFID has agreed to provide a grant
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90.000 million for improving health and nutrition facilities. Negotiations have also been concluded
with World Bank for a soft loan of $100 million for the implementation of the Health Sector Reforms
Programme. Schemes titled Population welfare program with an allocation of Rs.500.000 million,
PMDGP / PHSRP WB, DFID Sponsored with an allocation of Rs.2,000 million and Health
Insurance Card in four Pilot Districts with an allocation of Rs.4,000 million were included in the
development programme 2013-14.
Sanitation
To accomplish the cherished goal of a clean Punjab, the sanitation component is being
sharply focused. Pakistan Approach to Total Sanitation (PATS) would be given priority through
initiatives to eradicate the menace of Open Defecation which in turn would be a great step in the
preventive health care programme. A sustained programme to address this problem would enable
Punjab to achieve the objective of Open Defecation free Province. In addition to these steps, new
initiatives regarding elimination of ponds from major villages and solid waste management in rural
areas would be implemented through LG&CD Department to improve the sanitation indicators.
To achieve these targets, substantial resources are being provided to the sector by
allocating Rs.17,118 million for the financial year 2014-15 as compared to the allocation of
Rs.10,868 million in 2013-14.
In financial year 2013-14, 274 schemes were implemented which included 145 on-going
schemes and 129 new schemes. Out of these 274 schemes, 132 were completed which represent
almost 48% completion.
Annual Development Programme 2014-15 for water supply & sanitation has been
formulated with an effort to minimize throw forward of on-going schemes by allocating maximum
resources to the on-going schemes. Rs.11,590 million have been allocated to the ongoing
schemes which is 68% of total size.
Main objectives of Annual Development Programme 2014-15 are: Ensuring water quality through provision of water filtration plants.
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Social Protection
During FY 2013-14, an allocation of Rs.1302 million was allocated to this sector. During
2013-14, Social welfare Department established children home at Faisalabad for rehabilitation of
destitute and neglected children with the purpose to make them productive citizens of society. In
order to provide facility to the old people, a separate building for old age home at Lahore has been
established. The residents of this institute are provided free shelter, food, treatment and recreational
facilities. In the next financial year 2014-15, Rs.900 million has been allocated to the Social Protection
Sector. District Industrial Home would be established in the newly established districts of Chiniot &
Nankana Sahib. For socio economic empowerment of native women, the Government of Punjab
would establish Mini Sanatzars at Rajanpur, Sargodha and Sheikhupura. Qasar-e-Behbood would be
established at Faisalabad and Muzaffargarh which will not only provide quality training in different
demand driven skills but would also arrange work orders for women passing out from these centers.
In order to impart training in marketable skills to the poorest of the poor (Mustehqeen-ezakat), PVTC has established 175 VTIs throughout Punjab and producing approximately 50,000
trainees per annum and catering the needs of technical manpower required both in public & private
sectors. In the next financial year 2014-15, Rs.1,000 million would be provided to PVTC to enhance
their training capacity from existing 53,400 to 58,400 trainees.
The Women Development Department has established working women hostels in various
districts of Punjab to cater the need of residence for working women. The objective behind the
establishment of these hostels is to facilitate the working women so that they may perform their duties
diligently and efficiently. Under the Punjab Women Empowerment Package 2014, two new schemes
have been included. First, the voucher scheme for working women for hostel services has been
included in 2014-15 to provide affordable accommodations to low income salaried working women.
The second scheme relates to initiative for support to working women in the field of skill development,
women entrepreneurship, rozgar bank, etc. Toll free women's helpline to provide information about
laws relating to women inheritance rights, violence against women, employment, policies,
mechanisms and services to both women and men would be started. The Department is also
establishing Day Care Centers in collaboration with NGOs, NPOs in different districts of Punjab to
facilitate the working women to make their workplaces women friendly.
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Regional Planning
The process of development in Punjab has been somewhat skewed in its impact across
the regions. Less developed regions of Punjab comprising barani tracts, sandy deserts of
Cholistan, Tribal areas of D.G. Khan and Rajanpur and 11 districts of Southern Punjab have not
kept pace with the rest of the province in terms of development and economic progress. With
scanty rainfall, these ecological zones face the challenges of acute shortage of water, mostly small
land holdings and primitive agriculture techniques. Government assigns high priority to the removal
of regional disparities in the Province. This objective is being achieved through direct investment in
less developed areas to enhance rural household incomes and employment opportunities,
improving infrastructure and providing financial support to enhance production and skill
development of the target groups through participatory approach.
DFID assisted Punjab Economic Opportunities Programme (PEOP) initiated in 2010-11in
districts of Bahawalpur, Bahawalnagar, Lodhran and Muzaffargarh has now been extended to 10
more districts i.e. Lahore, Sheikhupura, Faisalabad, Chiniot, Sargodha, Gujranwala, Narowal,
Vehari, Khenewal and R.Y. Khan. Under this programme, 54,057 youth including 21,123 female
trainees have been provided skills training. International Fund for Agriculture Development (IFAD)
has joined the efforts of Government of the Punjab for maintaining the regional balance and
poverty alleviation by launching a project Southern Punjab Poverty Alleviation Project (SPPAP) in
2011-12 in the districts of Bahawalpur, Bahawalnagar, Rajanpur and Muzaffargarh having a total
cost of Rs.4,126 million. During the current FY around 10,000 families have been provided assets
creation package in the shape of provision of Livestock animals, land to landless widows and clean
drinking facilities to masses. In the next financial year 40,000 beneficiaries will be provided support
to enhance their incomes.
Integrated Cholistan Development Programme at the cost of Rs.2,348 million will create a
visible impact and improvement in the living quality of people of Cholistan. The package includes
construction and rehabilitation of roads & water supply schemes and desiltation of Tobas in
Cholistan. Keeping these facts in view, the sector has been provided with an allocation of Rs.7,150
million during 2014-15.
The specific features of Regional Planning Sector are as under:
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Water Resource Development (through Construction of 400 Mini Dams along with
Command Area Development) of Potohar Region, Barani Areas of Punjab.
Rain water harvesting project in all villages in Potohar Area by ABAD through
command area development, catchment treatment works (soil conservation works,
afforestation / plantation of forest tress), and solar energy irrigation system.
Promotion of alternate energy for command area development of 173 Mini Dams in
Potohar Region.
Capacity building of P&D Department for improved policy planning and monitoring
development process in Punjab (Phase-II).
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Capacity building of Directorate General of M&E for improved project planning, monitoring
and evaluation of development projects in Punjab.
Research and Development to boost the research related activities in the province.
LG&CD
Local level development and provision of civic services in urban and rural areas is the
function of District Governments, Tehsil Administrations and Union Councils. The provincial level
development programme of LG&CD is primarily aimed at plugging the financial and physical gaps,
providing province wise interventions and building the capacity of local governments to perform
their devolved task more efficiently. Rs.3,488 million has been allocated for LG&CD for the
financial year 2014-15. During 2013-14, the following major initiatives were undertaken and focus
on these priority areas would be continued:
i.
Six Solid Waste Management Companies were established during the year 2013-14
in six cities (Gujranwala, Sialkot, Faisalabad, Rawalpindi, Multan and Bahawalpur.
ii.
Three Solid Waste Management Models for rural areas have also been launched in
i.e. Bahawalpur, Lodhran, Chiniot Districts as pilot projects
iii.
Umbrella project for Elimination of Ponds from Major Villages of Punjab to improve
Sanitation / Eradication of Vector Diseases through Bio-Remediation (Phase-II)
launched. It would significantly contribute towards improved rural sanitation. Seventy
eight ponds in twenty eight districts have been selected to be drained out for
controlling the spread of water borne diseases
iv.
v.
Another mega initiative for improvement of graveyards has been launched in Punjab.
During the financial year 2013-14, 704 schemes for provision of requisite
infrastructure / facilities (boundary wall, storm water drainage facility, uncovered
concrete platform, lighting arrangements and shades / roof for funeral prayers) were
undertaken during 2013-14. During the year 2014-15, another 80 graveyards would
be improved.
vi.
Projects for parks development and landscaping and horticulture would also be
implemented in secondary/small cities
vii.
Moreover the projects for municipal services in Punjab and replication of pilot project
for preservation of cultural heritage in Lahore would also be undertaken.
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Roads
Roads are the predominant mode of transportation in the country commuting more than
90% of the passengers and freight traffic with an average yearly growth rate of 4.5% and 10.5 %
respectively. Strategies for road sector development in the province have been focusing on
consolidation and maintenance of the existing assets which include a vast network of provincial
highways, inter-district roads, and the communication links comprising rural access and farm-tomarket roads. In addition to above, the provinces road sector development portfolio also includes
major urban and intra-city road projects.
Road sectors total revised outlay for the year 2013-14 was Rs. 33.837 billion, registering
an increase of about 20% compared to the sectors revised allocation over the previous year.
During FY 2013-14 the sector achieved completion of 103 Schemes. Major schemes completed
during FY 2013-14 are listed as follows:
W/I of road from Bhawalpur Bypass to Chungi No 9 Multan with a cost of Rs.4,505 million.
Improvement / Rehabilitation of existing Multan road, Lahore from Thokar Niaz Baig to
Chauburji (Land Acquisition & Shifting of Utilities) with a cost of Rs.3,578 million.
Improvement and renovation of existing Multan Road in Lahore city from Scheme More to
Chuburji with a cost of Rs.993 million.
Dualization and Improvement of Rawat to Kallar Syedan Road, Distt. Rawalpindi With a
cost of Rs.916 million.
W/I of T.H.A.T Pail Road Section Dhoke Pathan to Talagang including Talagang Byepass
with a cost of Rs.810 million.
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W/I of road between Sharqpur and Sheikhupura i/c connecting bridge from Jaranwala
road with a cost of Rs.575 million.
During FY 2014-15, an amount of Rs.31.560 billion is being allocated for the Road Sector.
Indicated outlay as above includes allocation of Rs.11,531 million for the southern Punjab while an
amount of Rs.2,100 million is allocated for improvement and up-gradation of the Farm to Market
Roads network in the province.
During FY 2014-15, the road sector aims at completion of 337 schemes including
following major schemes:
Lahore Ring Road: Construction of underpass at Karol Ghati with a cost of Rs.505 Million.
Major new initiatives being taken in the roads sector up during FY 2014-15 are as follows:
Construction of Bridge over River Indus Near Miran Pur R.Y.Khan with a cost of
Rs.4,000 Million.
Construction of Flyover on G.T Road at Aziz Road Cross Gujranwala with a cost of
Rs.4000 Million.
W/I of road from Yazman to Ahmedpur East Bahawalpur with a cost of Rs.1,500 Million.
Construction of Approach Road to Icha Bangla, R.Y.Khan with a cost of Rs.1,500 Million.
Construction of dual carriage way from Burewala to Chichawatni road, Vehari with a
cost of Rs.1,164 Million.
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W/I Construction of road from Laksian Pull at Km 130 of Lahore Sargodha Road to
Lilanai with a cost of Rs.978 Million.
Construction of Over-head Bridge on the railway lines between Jhanian Road to Police
station sadder and Abdulghafoor road at Khanewal city with a cost of Rs.800 Million.
Irrigation
One of the key policy goals of ADP 2013-14 has been rehabilitation and modernization of
provinces irrigation network including barrages, canals and secondary irrigation channel. This has
been a fundamental investment priority of the provincial government not only to address issue of
water scarcity but also to mitigate potential threat to structural stability of century old water
conveyance network. This is a serious concern emanating from the expected increase in frequency
of super floods coupled with inter seasonal fluctuation of surface flows in the coming years due to
climate change. A total of 62 schemes, 47 ongoing schemes and 15 new schemes, were included
in the irrigation sector during 2013-14 covered wide-ranging water conservation, drainage and
flood management, interventions along with programs envisaging irrigation system rehabilitation
and development, and institutional reforms. Overall funding allocation in ADP 2013-14 has been
Rs.23.000 billion.
Some of the significant development milestones in the irrigation sector during the financial
year are:
Launching of the mega barrages rehabilitation &modernization projects at Jinnah over
river Indus at a cost of Rs.12.7 billion, at Khanki over river Chenab at a cost of Rs.23.4
billion, at Balloki over river Ravi at a cost of Rs.2.4 billion, at Sulemanki over river Sutlej at
a cost of Rs.3.0 billion, at Trimmu on Cherah at a cost of Rs.12.1 billion and Punjnad on
Cherah at a cost of Rs.6.000 billion.
90% completion of Lower Chenab Canal (Part B) feeding vast canal command area of
1.67 million acre;
Accelerated implementation of the Lower Bari Doab Canal Improvement Project (LBDCIP)
and Punjab Irrigation System Improvement (PISIP) projects entailing extensive irrigation
canals and secondary channels remodeling projects to address irrigation water demand in
25% of provinces overall irrigated command area.
Province-wide selective lining of distributaries and minors in number of canal commands
in saline ground water and high seepage zones.
Development of Nine (9) small dams serving for irrigation supplies to over 25,400 acre of
rain-fed (barani) farmlands in Pothohar;
100% completion of flood dispersion and management structures to harness and
channelize hill torrents in D.G. Khan and Rajanpur districts to avoid flood devastation in
vast areas in southern Punjab.
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Lower Bari Doab Canal Improvement Project (PC-I) (Estimated cost of Rs.29,832
million)
Punjab Irrigation System Improvement Project (Estimated cost Rs. 11,534 million)
Management of Hill Torrent in D.G khan and Rajanpur District (Estimated cost of
Rs.8,205 million)
Construction of flood embankments and protection works along left and right bank
of river Indus for Miranpur bridge (Estimated cost of Rs.1,500 million)
Energy
Energy Department was established by Government of Punjab in 2011 to oversee and
administer the development, growth and regulation of Energy Sector in Punjab. Whereas
Department has a consistent focus on effective regulation in energy conservation and regulation, it
has set up wings to facilitate power generation in the province. Punjab Power Development Board
(PPDB) facilitates power generation in the province by engaging private sector. In addition to that
two public sector companies i.e. Punjab Power Development Company Limited (PPDCL) and
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Punjab Quaid-e-Azam Solar Power Company have been set up to expedite power generation in
the province.
Total generation capacity in the province of Punjab is only 9564 MW against its present
requirement of 14,000 MW which is increasing at the pace of 8% per annum. It is presumed that in
the year 2018 the demand of Punjab will be 20,570 MW and by the year 2025, this demand will
increase up to 35,254 MW.
During 2013-14, following meaningful advancements have been made;
Feasibility Study was completed for two coal power projects 2x55 MW each for
Industrial Areas in Lahore & Faisalabad
Feasibility Study was completed to set up 2.5 MW of solar PV power plant at Islamia
University Bahawalpur to provide un-interrupted power supply & research base for
the university students.
Under CM Ujaala Program 78,000 Solar Home Solution units have been procured to
distribute among deserving school students
During current year, 100 MW Solar Power Plant was started near Bahawalpur, under a
public sector company Punjab Quaid-e-Azam Solar Power Company. The plant is scheduled to
start power generation by December 2014. Work on enhancement of this generation capacity by
another 900 MW will begin during 2014-2015 through employment of innovative capital structuring
and private sector participation.
Under Coal based Power Initiatives the Provincial Government took another bold initiative
to engage private sector in power generation. Under the initiative it is expected to set up 6 x 1320
MW power plants at 06 sites in Punjab in next four years. Private investors showed great interest in
this initiative. This initiative will continue during 2014-15 whereby work on 2 x 55 MW coal based
power plants is planned to kick-off in Lahore and Faisalabad.
FY 2014-15 will witness a major thrust towards renewable energy sources and energy
efficiency and conservation initiatives. In this regard a number of projects based on Bio mass have
been identified. Efforts are being focused to attract private and foreign investment in this sector to
augment GoPbs development outlay and bring in management efficiencies. Work on various
Public Private Partnership models has already started which will gain momentum during FY 201415. In order to achieve these targets, an allocation of Rs.31 billion has been provided to Energy
Sector in the ADP 2014-15.
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Public Buildings
The Public Buildings (Government Housing & Offices) sector caters to provide residential
and office accommodation facilities for nearly all administrative departments, mainly clustered
under the Police, Prisons, Home, Judiciary, S&GAD, Provincial Assembly, S&GAD, Board of
Revenue (BOR) and Communication & Works (C&W) sub-sectors.
During FY 2013-14, an amount of Rs.4,839 million was allocated for the public buildings
sector which was subsequently increased to Rs.6,400 million including Rs.2,000 Million for
Judiciary and Rs.1,500 Million for Jails. In all, 240 out of 530 schemes covered under ADP 2013-14
including High-Security Prison, Sahiwal; District Jails, Okara, Bhakkar, and Layyah and fifteen (15)
police stations. Owing to influx of competitive demands under several other sectors, the public
buildings sector during FY 2013-14 were assigned comparatively low priority, however for FY
2014-15 a higher allocation of Rs.8,000 million has been made under current ADP including
Rs.2,500 Million for Judiciary and Rs.2,100 Million for Jails. Major focus in the Public Buildings
sector under instant plans is given to the high-priority public service delivery domains as illustrated
under provision of the Integrated Command, Control & Communication (IC3 Center under Police
Department, the BORs service centres, and security related strengthening of Judiciary projects.
The major initiatives during FY 2014-15 are as under:
Construction of Courts along with allied facilities for Judicial Officers in the Punjab
Strategic Interventions
To meet the objectives of provision of offices and residential facilities in the provinces
public sector, the MTDF aims to fulfill the vision through pursuit of following strategies:
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Urban Development
In addition to development of traditional sectors, the Government of Punjab undertook
various initiatives to develop the large cities as engines of economic growth. This is immensely
important as more than 40% of the Punjabs population now resides in urban areas. Under the
Development Programme 2013-14, Urban Development sector was allocated funds amounting to
Rs.13.822 billion for 36 schemes. However, the allocation was revised to Rs.41.715 billion for 118
schemes of development authorities and WASAs of five large cities. During this period, 15
schemes were completed.
During the year 2013-14, a number of major road projects were undertaken including the
following:
Elevated Signal Free Junction at Azadi Chowk
Elevated Signal Free Junctions at Chungi Amarsidhu, Qainchi and Ghazi Chowk
Alternate Route to Circular Road at Lahore
Widening and Improvement of RB Canal Road, Faisalabad
Widening/ Improvement of Left Over Section of Millat Road, Faisalabad
Traffic Improvement at Marrir Chowk through addition of two lanes on either side of
Murree Road under Railway Bridge, Rawalpindi
Similarly, for water and sanitation services, various projects for replacement/installation of
tube-wells, installation of water filtration plants, surface water induction, replacement of outlived
and rusted water supply lines, laying of trunk & lateral sewers, procurement of machinery &
equipment and widening and improvement of drains were undertaken for increasing efficacy of
WASAs and improving service delivery. Moreover, projects for master planning of some of the
large cities and water and sanitation services net-work were also undertaken during the year 201314.
In the Annual Development Programme 2014-15, Rs.40,400 million have been allocated
for implementation of 75 schemes. Emphasis of the programme would be on completion of the
ongoing schemes that are at advanced stage. Higher priority would be on the improvement and
augmentation of the existing network for water supply, sewerage and drainage systems in five
large cities. Master planning for the services infrastructure for the cities requiring updating would
also be undertaken under this programme. Certain new initiatives including pilot projects for
provision of comprehensive water supply system (zoning, 100% metering, supply through storage
reservoirs and filtration plants/taps) would be implemented in Lahore for improved and better
quality water distribution to the consumers. Moreover, projects for surface water induction for
Lahore and Faisalabad have also been proposed under the programme.
Due weightage has also been assigned to intra city communication networks like dual
carriageways, flyovers, underpasses, elevated expressway, metro bus services and metro train
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projects. It includes the orange line metro projects of Lahore and metro bus projects for
Faisalabad, Multan and Rawalpindi. In addition to the said services, preparatory study and the
project for River Ravi front Urban Development Zone has also been proposed. It would generate
economic activities and provide state of the art recreational facilities like theme park, lake and
housing facilities in the project area. Under this project, a comprehensive scheme for treatment of
waste water of entire Lahore city would also be undertaken. It would facilitate the elimination of
untreated flows of waste water to River Ravi, generate water supplies for downstream irrigation
purposes and improve the underground water quality.
Furthermore, an allocation of Rs.1,500.00 million has been made for the Low Income
Housing which includes provision of serviced plots, small housing units and apartments to the low
and medium income groups and Rs.500.00 million for development of Parks & Horticulture for the
cities.
Production Sector
Agriculture and Livestock sectors have a paramount role in ensuring food security for
whole population of the province. In fact Punjab is also expected to contribute to food security of
the whole country. In ADP 2013-14, major focus of strategy in this sector has been on meeting the
challenges of food security, productivity enhancement, developing direct linkages of agriculture and
livestock farmers with the markets and quality improvements through accreditation and
certification.
Agriculture and livestock have immense economic potential as these provide food and
fiber besides being major source of foreign exchange. Livestock is a newly emerging economic
sector with high potential in terms of economic returns. Livestock contribution to agriculture value
added stood at 55.9 percent while it contributes 11.8 percent to the national GDP during 2013-14.
In the context of global food crisis of 2008, major focus in Agriculture & Livestock is on meeting the
challenges of food security and increase the growth rate for employment generation and poverty
reduction in the rural areas. Hence, self-reliance, food security and promotion of exportable high
value crops, milk and meat productivity enhancement accompanied with improved marketing are
the key areas of emphasis. A brief account of development activities during 2013-14 is as under:
a) To produce frontline agricultural extension workers by conducting three year Diploma in
Agricultural Sciences, establishment of an In-service Agricultural Training Institute at
Karor, District Layyah has been completed at a total cost of Rs.154.532 million.
b) To strengthen and coordinate existing research activities on mangoes leading towards
development of new varieties, productivity improvement and enhancing export of
mangoes, establishment of Mango Research Institute at Multan has been completed at a
total cost of Rs.98.982 million.
c) During second year of mega project Punjab Irrigated-Agriculture Productivity
Improvement Project, 1,500 Laser leveller units were distributed to service providers at a
subsidy of Rs.225,000 per unit, High Efficiency Irrigation Systems were installed on 7,000
acres at a subsidy of 60% of the cost, lining of 1,500 watercourses in canal command and
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500 irrigation schemes in non-canal command areas were completed. The total cost
incurred on carrying out the afore-said activities has been Rs.4,500 million.
d) To cater to need of trained manpower in agricultural sciences and provision of
professional education facilities in Southern Punjab, first phase of Muhammad Nawaz
Sharif University of Agriculture, Multan has been completed at a total cost of Rs.45.502
million whereas a sub-campus of University of Agriculture, Faisalabad at Burewala is
being established for which an amount of Rs.150.199 million has been incurred.
e) To provide three-tier support to farmers, processors and exporters to enhance export of
fruits and vegetables in compliance of Global GAP/IFC parameters, Supply Chain
Improvement Project was launched during 2011-12 for a period of three years. However,
the project objectives have not been achieved and hence revised / restructured during
2013-14 for another three years.
f)
j)
To conserve and propagate Nili Ravi buffalo breed, Buffalo Research Institute, Pattoki,
District Kasur has been strengthened through provision of latest R&D technology
regarding semen and milk analysis at a cost of Rs.126.251 million.
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Allocation for Agriculture and L&DD Sectors have been enhanced from Rs.7,974 million in
2013-14 to Rs.13,160 million in 2014-15.
New initiatives for 2014-15 include: Introduction and Adaptation of Advanced Technologies through
Local Development to Mechanize Various Farm Operations; Management of Fruit Fly with Special
Reference to Non-conventional Methods; Targeting Malnutrition and Low Productivity through
Balanced Use of Fertilizer; Development of Castor bean varieties and Sunflower Hybrids to
Enhance Oilseeds Production; Establishment of Punjab Bio-Energy Institute (PBI) at UAF;
Establishment of Export Oriented Floriculture Centre at Pattoki; Livestock & Access to Market
Project (IFAD assisted); Establishment of University of Veterinary and Animal Sciences at
Bahawalpur; Enhancing Dairy Production through Exotic Semen; Up-scaling Research Centre for
Conservation of Sahiwal Cattle (RCCSC) Genetic Improvement Programme at Jhang;
Establishment of Model Veterinary Hospital at One Tehsil of each Division in Punjab and Provision
of Rural Poultry Breeds through Augmenting R&D.
Transport
One of the highlights in the transport sector in 2013-14 was initiation of work on
Rawalpindi-Islamabad Metro Bus Service (MBS) aimed at addressing the transport problems of
urban residents and reduces traffic congestion. Metro Bus System after completion in 2014-15
shall provide efficient, affordable and comfortable Public Transport system to the commuters in
Rawalpindi-Islamabad.
During FY 2014-15, a new initiative of Inland Waterways Transport is being launched. The
project is of unique nature and would explore the opportunities of comfortable waterways transport
facilities to the inhabitants of Lahore. The ongoing scheme for capacity development of the
Transport Department through Transport Planning Unit shall be continued during 2014-15 with
funding of Rs.39 million in 2014-15.
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Stamping) has been proposed. These projects are part of the broader vision of
Government of Punjab i.e to provide better quality services to citizens through the use of
Information and Communication Technologies (ICTs) in order to provide security of title to
the landowners in the province.
Incubator Centers and Tech Hub Space at Arfa Software Technology Park for IT startup
firms to provide IT Training, manpower development regarding latest tools and
technologies adopted in international business and marketing with the help of IT
awareness
Introduction of Citizen E- Services and IT Centric Intervention & Smart Monitoring Under
Punjab Public Management Reforms Program (PPMRP) aiming at smart monitoring,
accessibility of reports and automation of service delivery on service delivery centers of
government.
Establishment of Video Conferencing facility for efficient information exchange, speedy
decision making regarding emergent circumstances and Policy up-dation.
The dengue control campaign through Larvaciding and Fogging/IRS Reporting System
which enable data capture on the move, Verification via GPS coordinates/ real time data
entry into central server and online dashboards which is accessible by all stakeholders.
The new initiative of telemedicine to provide disease evaluation, diagnostics and
treatment coverage to the patients living in remote areas using modern technologies and
state of the art facilities through qualified professionals. Whereas, District Health
Information System is meant for disease reporting, patients treatment & medication
schedule, disease patterns as well as appropriate management of appointments dates to
facilitate general public for availing better health care.
Evidence based monitoring of Pro-Poor to effectively reach out the poorest of the poor to
pour targeted subsidy.
Develop process of initiating performance evaluation, monitoring system of Government
departments, establishing KPIs of employees through Pilot Project of I.T Based Profiling
of Government employees for effective service delivery.
Continuity of E-Governance applications already established under Citizen Contact
Centers and Citizen Feedback Model in order to introduce transparency, efficiency and
minimize corruption using E-tools.
The allocations have been secured for major initiatives of Police Department like
Computerization of all Police Stations using modern technologies i.e Hardware, Software,
Network Equipment (Active & Passive), Internet Connectivity in order to run the police
business in an efficient manner. Punjab Police Integrated Command, Control and
Communication Centre is being included in ADP to sort out terrorist activities and fool
proof security of the Punjab Province.
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During 2013-14, total development outlay for emergency 1122 sector was Rs.1.65 billion.
Establishment of Emergency Service Academy at Lahore is near completion during the current
financial year. Strengthening of emergency service in existing cities has been completed during
2013-14. Establishment of emergency service in Tehsils of Punjab (Phase-I) was also completed in
the year 2013-14. A development outlay of Rs.1.45 billion has been included in the ADP 2014-15.
One of the new initiative is the Managing Emergency in High-rise Buildings has been included with
a total allocation of Rs.400.00 million to address the emergency like fire in the high-rise buildings,
adequately. The total allocation for SPDP and District Development Package for the Sector is
Rs.310.00 million. This package will cater for the facility of emergency 1122 in the districts of South
Punjab as well as for Districts of Sheikhupura, Lahore and Gujranwala.
It is envisaged that these services will facilitate in mitigating the sufferings of general
public by reaching the vulnerable in the shortest possible time.
Environment Sector
During 2013-14, revised allocation of Rs.54 million was provided to this Sector. EPD
utilized Rs.47 million against the available funding of Rs.54 million. The major initiatives during FY
2013-14 included establishment of monitoring system in Punjab, which assisted EPD to estimate
and assess the environmental parameters in different districts. The EPD officers in the province
were strengthened by providing the missing facilities through which the competency of the EPD
offices has been enhanced in collection and analysis of Environmental data. The work on
establishment of Biodiversity Park at Murree continued and the scheme would be completed during
2014-15.
An amount of Rs.190 million has been allocated during FY 2014-15 for Environment
Sector for five new and five ongoing schemes. The scheme titled Establishment of Air Quality
Monitoring System in the Punjab aims at building the capacity of EPA to effectively monitor and
implement Provincial Environmental Quality Standards (PEQS). The provision of missing facilities
in EPA field offices is an important initiative of the Department for effective monitoring of polluters
and compliance of PEQS. The development of Biodiversity Park in collaboration with City/District
Governments will not only help in conserving the endangered species but would also create
awareness among the masses for conservation and protection of biodiversity. The Biodiversity
parks have been established at Bhawalpur, Kasur and DG Khan and Biodiversity park at Murree
will be completed during 2014-15. The formulation and implementation of regulatory framework is
one of the prime responsibilities of EPD. The Department is creating a legal cell to introduce and
promote management and legal discipline to effectively enforce the environmental regulations.
The department has envisaged commencement of a number of new interventions during
2014-15. The notable ones are to establish benchmarking of major environmental parameters in
the Punjab. This data will enable the scientists and policy makers to gauge the changes in
environmental resources like air, land and water. The industrial and municipal waste water are
being thrown untreated / unchecked in the water bodies like river, drains and canals of Punjab. In
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order to ascertain the feasible options for treatment of wastewater, a study will be undertaken
during this financial year to prioritize the most feasible treatment option for Hudiara drain. Similarly,
the evaluation of water quality and characterization of industrial effluents in the province will also
be conducted. The review, rationalization and revision of environmental laws, rules, regulations &
PEQS will be done during 2014-15.
Archaeology
In the original ADP of 2013-14 of Rs.294 million was allocated to Archaeology Sector for
25 schemes and out of this 19 were ongoing and 6 were new. These schemes related to
conservation and development of historical monuments and sites.
During 2013-14, 06 schemes have been completed. In the ADP 2014-15, Rs.380 million
has been allocated. Out of this allocation, Rs.329.152 million allocated for 19 ongoing schemes
and the remaining amount i.e. Rs.50.848 for 06 new schemes. Major focus is on completion of
ongoing schemes and it is expected that 08 ongoing schemes would be completed during the
2014-15.
Six new schemes included in the ADP 2014-15 pertain to conservation and rehabilitation
of historical monuments and sites which need immediate attention to preserve and restore them to
the original condition.
A new scheme titled Capacity Building of Directorate General of Archaeology through
improvement in human resource, equipment and trainings etc. has also been included in the ADP
2014-15 to enhance its capability to preserve and develop the built heritage of Punjab.
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Table 4.2
Comparison of other Development Initiatives for 2013-14 and 2014-15
(Rs. in Million)
Sr.#
Name of Programme
B.E. 2013-14
B.E. 2014-15
7,500
7,500
2,000
2,000
3,000
2,000
500
1,000
500
500
4,000
4,000
Population Welfare
2,500
500
5,000
2,000
QA Solar Bahawalpur
9,000
10
Women Development
1,000
900
11
12
TEVTA
PVTC
1,500
-
2,000
1,000
13
1,000
500
14
3,000
1,000
15
500
500
16
2,000
1,400
17
3,000
2,000
18
PIEDMIC/FIEDMIC
3,000
1,000
19
1,200
20
500
21
Internship Program
1,500
22
3,000
23
5,000
--
--
--
Special Initiatives
24
Special Initiatives
15,000
TOTAL:
50,000
55,000
Allocations for Innovation Development Fund, Clean Drinking Water and Infrastructure Development Fund
/VGF have been provided under regular ADP. An allocation of Rs. 6 billion has been provided under skill
development program for Youth
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Chapter 5
5.
5.1
In terms of population, Punjab is the largest province of the country. It has approximately
one million employees and 436,995 pensioners, the number whereof is growing continuously. As
per actuarial assessment undertaken in 2010, total pension liability estimated at 30th June 2010
was to the tune of Rs. 687.7 billion. Amount of pension paid to pensioners in FY2012-13 was
Rs. 65 billion and it is expected that this figure will touch Rs. 75 billion in FY2013-14.
Government has an elaborate and well defined pension benefit scheme regulated under
Section 18 of the Punjab Civil Servants Act 1974, and the Punjab Civil Service Pension Rules. The
scheme entitles the pension to the employees who have either reached the age of superannuation
(60 years) or have retired early after serving for 25 years. Pension Rules also prescribe ten years
as a minimum qualifying service for receipt of pensionery benefits. Gross Pension is determined on
the basis of last drawn pay multiplied with the number of years of service and factor 7/300. A
pensioner has the option of commuting upto 35% of his gross pension at the time of retirement. Net
pension is paid for the life time of the employee. After his death, his family is entitled to family
pension. The Government also increases pension periodically to mitigate the effects of inflation.
5.2
In recent times, Pension Reforms have gained pace around the World. In conformity with
the global trend, Government of Punjab also initiated number of pension reforms in last few years.
To ascertain pension liabilities, an actuarial analysis was undertaken. Pursuant to this study and as
an important reform agenda of Government of Punjab under its program for public sector financial
management reforms, a dedicated corporate entity i.e. Punjab Pension Fund was established
through enactment by Punjab Provincial Assembly. An elaborate structure for the management of
Punjab Pension Fund was established with the induction of professional management. Moreover,
number of committees such as management committee, investment committee, accounts and audit
committee, HR committee etc. were also established to monitor and oversee the activities of the
Fund. These committees are not only represented by public sector but also have an adequate
representation of professionals from private sector. An elaborate oversight mechanism is also in
place to review and oversee the investment policy, funding strategy and other such arrangements
related to fund management. In line with the parameters laid down in the legal framework of Punjab
Pension Fund, Central Depositary Company (CDC) has been appointed as the trustee of the Fund.
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While far reaching reforms were introduced not only to ascertain the pension liabilities but
to formulate medium and long term funding / investment strategy of the Fund, it was also felt that
there is a need to reform and improve the existing pension processing and disbursement system
focusing on facilitating existing and future pensioners. Accordingly, it has been found expedient to
conceive, develop and implement a reformed simplified pension processing and disbursement
system through the use of ICT based applications. It is hoped that in addition to ease of doing
business, reformed pension disbursement system will allow the pensioners to have access to more
convenient modes of receipt of pension. The system is intended to be piloted first in Lahore District
which has the maximum number of existing pensioners. After the successful implementation of the
pilot, the same will be up scaled and rolled out to other districts of Punjab Province.
5.3
Pension papers with the formal sanction of Pension Sanction Authority are submitted to
District Accounts Officer (DAO) / Accountant General Office (AG) for issuance of Pension Payment
Order (PPO). DDO / AG Office issues PPO after due verification of pension papers. Pension is
paid manually either by Treasury Officer or by National Bank. In the current system, after issuance
of the PPO there is disconnect between Accounting Office and Disbursing Authority. Pensioner or
his representative visits NBP / Treasury Office for disbursement of pension. Appearance of the
pensioner twice a year in the NBP / Treasury Office is mandatory as a proof of his / her life. Any
change in pension on account of annual revision is posted manually by NBP/ Treasury Office. The
current system for pension disbursement is cumbersome and lacks transparency.
5.4
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Cash withdrawal by pensioners through branchless banking outlets and bank-led model
of mobile companies is unique in a sense that it even saves them from visiting the bank. The
innovation will be of great convenience to pensioners. Further, biometric verification of pensioners
including proof of their life through NADRA will allow pensioners to get these particular recorded
without visiting to NBPs/Treasury Offices and waiting in queue for verification of their particulars
manually. The pensioners will also be encouraged to save as withdrawal of the money will take
place when it is actually needed by the pensioner. A host of banking disbursement modes e.g.
Cheque, Debit Card, ATMs, branchless banking outlets like UBL Omni and bank-led model of
mobile companies will facilitate pensioners as they can withdraw anytime from anywhere in
Pakistan. The automated pension disbursement will bring greater transparency and accuracy into
the whole system. It will also help in reducing leakages in the system.
5.7
A major reform was introduced during the year in the form of New Simplified Procedure of
Processing and Disbursement of Pension through Pension Roll. Under this simplified procedure
notified on December 18, 2012 a pensioner has to give a one page descriptive roll containing a list
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of his/her family members, an undertaking for making good any established recovery and option for
commutation percentage he/she wants to avail. The Department/Pension Sanctioning Authority
(PSA) in return issues a one page notification order of his/her retirement which is submitted to the
AG Office/District Account Officer along with a copy of his/her last pay slip, a copy of CNIC and
original service book. In case of a gazetted civil servant, a service profile is also submitted by the
pensioner. The AG Office/District Account Officer prepares Pension Payment Order (PPO) on the
basis of these documents and does not seek any other document from the pensioner. These
reforms were piloted in Lahore district and pensioners retiring in January 2013 were advised to
submit their pension papers under new procedure. The Chief Minister Punjab, in a simple but
impressive ceremony held on 1st January 2013 distributed PPOs to 20 civil servants retiring in
January 2013. On directives of the Chief Minister, the New Simplified Procedure of Processing
and Disbursement of Pension through Pension Roll were also introduced in districts of Chakwal,
Rahim Yar Khan and Multan. During FY2013-14 New Simplified Procedure of Processing and
Disbursement of Pension through Pension Roll are being implemented in eleven (11) more
districts of Punjab namely Attock, Rawalpindi, Jhelum, Bahawalpur, Lodhran, Kasur, Sheikhupura,
Nankana sahib, Khanewal, Vehari and Bahawalnagar.
Another major reform titled Disbursement of Commutation and Monthly Pension through
Pension-Roll was notified by the Government on January 9, 2013. Irrespective of how a pension
case is processed i.e. through old pension papers or through new simplified procedures, the
pensioners in all districts of Punjab will henceforth be disbursed their commutation and monthly
pension through pension-roll only. This reform has the effect that new pensioners are only paid
pension directly into their bank account instead of pension payment through NBP under decades
old legacy system. As a consequence of this initiative by the Government the process of enrolment
into pension roll for direct credit of pension into bank account has picked up considerably in all
districts of Punjab. A report generated from SAP R/3 PIFRA system shows enrolment of 64,934
pensioners in pension roll at 31st May 2014 compared to 8,279 pensioners enrolled in pension roll
at 31st December 2012.
5.9
Institutional arrangements
Disbursement System
for
Reformed
Automated
Pension
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government intends to broaden delivery modes of pension benefits through commercial banks and
telecoms.
Key steps involved in the reformed pension disbursement system shall inter-alia include
the following:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
5.10
Automated pension disbursement system is being piloted in Lahore district. Once all the
project parameters are in place and transition from manual to automated pension disbursement is
successfully achieved, the project will be up-scaled in other districts of the Province. Successful
implementation of automated pension disbursement system will encourage the Government to
implement automated disbursements in other departments. It is expected that transition from
manual to automated pension disbursement will be accomplished in significant number in Lahore
district in FY 2014-15.
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CHAPTER 6
DEBT AND CONTINGENT LIABILITIES
6.1
DEBT STOCK
Punjab Government has a small debt liability compared to size of the gross regional
product of the province. At end-June 2014, the provinces total debt was Rs.451.8 billion, or 3.52%
percent of GSDP1. This ratio appears even smaller relative to national GDP, i.e., 1.9 percent2.Of
Punjabs total debt, 6 per cent or Rs.26.1 billion (Annex-I) is domestic while 94 per cent or
Rs.425.6 billion (Annex-II) is foreign (Table 6.1). Asian Development Bank (ADB) with 46 percent
holding is the principal creditor of Punjab foreign debt. This is followed by the World Bank and
Government of Japan with 46 percent and 6 percent foreign debt holding respectively (Table 6.2).
Table 6.1
Punjab Total Debt Stock as on June 30, 2014
Stock
(Rs. in Billion)
Foreign Debt
Domestic Debt
TOTAL
In Percent of Total
425.6
94%
26.1
6%
451.8
100.0%
Note: Rs/US$ EoP Exchange rate of 99 is used to estimate rupee value of foreign
debt stock as of end June, 2014.
Punjabs foreign debt portfolio is highly concessionary and of long term maturity. In 201314, average explicit interest rate on foreign debt stood at only 1.47 percent with average maturity
of15 years (Table 6.2). Most of the loans have embedded fixed interest rates; only 16 loans are on
LIBOR3 terms (variable interest rate). Foreign debt, in terms of currency composition, is heavily
denominated in US Dollars which accounts for more than two-thirds of foreign debt stock. During
2013-14, foreign debt stock increased by Rs.22.4 billion. Favorable exchange rate movements, of
US Dollar and Japanese Yen, resulted in transational gains4 in the foreign debt stock of Punjab
1There
are no official provincial GDP estimates in Pakistan. Nominal gross provincial value added (GSDP) used for Punjab is
Rs.12,822.4 billion based on Punjab MTFF estimates.
2 This ratio is calculated using the nominal GDP of Pakistan in 2013-14 at factor cost that approximates to Rs.24,085.1 billion.
3London Interbank Offered Rate
4 In Pakistan, external loans are contracted in various currencies but disbursements are effectively converted into Pak Rupee. As Pak
Rupee is not an internationally traded currency, other currencies are bought and sold via selling and buying of USD. Hence, the
currency exposure of foreign debt originates from two sources: USD/other foreign currencies and PKR/USD. This two pronged
exchange rate risk is called translational gain/loss. Rs/US$ and Rs/JPY end of period weighted average exchange rate during this
period (point to point) appreciated by almost 0.1 percent and 2.8 percent respectively, causing debt stock to decline by almost Rs.3
billion.
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government during 2013-14. This impact would have been the reverse, in line with its historical
trend, had it not been due to appreciation of Pak Rupee against US Dollar and Japanese Yen.
Table 6.2
Punjab Outstanding Debt Portfolio as of June 30, 2014
ADB
IDA*
IBRD*
JAPAN
IFAD
FRANCE
IDB
OPEC Fund
TOTAL
CDL (Normal)
CDL (Scarp)
TOTAL
Stock
Rs. Billion
196.7
152.0
44.9
25.8
2.3
3.3
0.3
0.4
425.6
Foreign Debt
Avg. Interest
Rate
0.96%
0.87%
0.86%
1.65%
0.83%
1.60%
2.50%
2.50%
1.47%
Avg. Maturity
No. of Yrs
13
19
12
17
20
16
9
11
15
In percent
of Total
46%
36%
11%
6%
1%
1%
0%
0%
100%
Stock
Rs. Billion
17.4
8.7
26.1
Domestic Debt
Avg. Interest
Rate
13.29%
12.70%
13.10%
Avg. Maturity
No. of Yrs
25
25
25
In percent
of Total
67%
33%
100%
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Figure 6.1
Sectoral Share in Outstanding Punjab Foreign Debt, June 30, 2014
Figure 6.2
Punjab Debt Service (in % of total Revenues), 2006/07 - 2013/14
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6.2
Funding strategies for meeting the Pension and General Provident Fund liabilities
have been adopted and are regularly reviewed and updated; and
Punjab Pension Fund and Punjab General Provident Investment Fund have been
created to invest the funds (set aside by the Government for meeting, at least
partially, its future Pension and General Provident Fund liabilities) in accordance with
the investment policies approved by the Management Committee of the Funds.
During the FY2013-14, Punjab Government contributed Rs. 4.8 billion in Pension Fund
and Rs. 3.347 billion in GP Fund for capitalization of these Funds. For FY2014-15, Punjab
Government has allocated an amount of Rs.10 billion for capitalization of Pension Fund and
Rs.4.960 billion for GP Fund. Increased contribution in Pension and GP Funds will make up for
fewer contributions in earlier years.
6.2.1
Pension Liability
The estimated accrued pension liability of active employees and pensioners (combined)
as of June 30, 2010 is Rs. 687.7 billion detailed below:-
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Table 6.3
Pension Liability
(Rs. in billion)
Active Employees
Pensioners
Total
No of employees/pensioners
938,511
436,995
1,375,506
Accrued Liability
401.9
285.8
687.7
It may, however, be noted that despite increase in pension liability, the pension expense
as percentage of total Government revenue is expected to remain within 8% of the total revenue as
shown below:Figure 6.4
Pension Expense as Percentage of Revenue
9%
8%
6%
5%
4%
3%
2%
1%
0%
2010 - 11
2011 - 12
2012 - 13
2013 - 14
2014 - 15
2015 - 16
2016 - 17
2017 - 18
2018 - 19
2019 - 20
2020 - 21
2021 - 22
2022 - 23
2023 - 24
2024 - 25
2025 - 26
2026 - 27
2027 - 28
2028 - 29
2029 - 30
2030 - 31
2031 - 32
2032 - 33
2033 - 34
2034 - 35
2035 - 36
2036 - 37
2037 - 38
2038 - 39
2039 - 40
Percentage of Revenue
7%
Financial Year
Pension Expense as % of Revenue
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6.2.2
The growth in GP Fund balances (i.e. liability), assuming interest credited to GP Fund
balances at a rate of 12% per annum, for the 30 years, is illustrated in Annex-V.
6.2.3
For the purpose of actuarial valuation of Punjab Government pension and GP Fund
schemes, the following assumptions have been used:
Rate of inflation
10% p.a.
Rate of return of Fund
12% p.a. (Real return 2% p.a.)
Employees salary growth
11% p.a. (Real growth 1% p.a.)
Pension growth rate
8% p.a. (Real growth -2% p.a.)
GP Fund subscriptions growth rate
8% p.a.
Govt. Revenue growth rate
10% p.a.
Increase in employees
1% of total active employees
6.2.4
Funding Strategy
Building up reasonable pension assets during the next 5-10 years with a view not only to
discharge a part of pension expense as an off-budget item but also to cater for any
expected or unexpected spikes in pension expenditures through the earnings of the
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Punjab Pension Fund. This in turn will create fiscal space to meet partial pension pay out,
if needed. The funding would be made available from provincial resources.
(ii)
The Government would transfer equivalent amount from the Provincial Consolidated Fund
to the annual employees GP Fund contributions every year and in addition would amortize
past arrears of GP Fund annually from the Provincial Consolidated Fund for the next 30
years.
During the initial years, contributions were relatively limited, owing to the continuing
economic downturn which had a direct correlation with the tax collection efforts. Now it is expected
that greater resources will be spared for funding Pension and GP Fund liabilities as the economic
situation has stabilised. The table below illustrates the funding strategy for the next 5 years:
Table 6.4
Funding Strategy 2014-19
(Rs. in billion)
**
Financial Year
Annual Regular
Contribution
deducted from
Salaries
Past GP Fund
Liability
Amortization
Instalment
Total Amount of
Pension Fund
Contribution
Total
Contribution
2014-15
2015-16
2016-17
2017-18
2018-19
8.1
8.9
9.8
10.9
11.9
4.0
5.1
6.2
7.4
8.7
4.0
**6.0
**6.6
**7.2
**7.9
16.1
20.0
22.6
25.5
28.5
From 2015-16, in case of pensions, the funded amount will be a percentage of the estimated basic salary, which is the basis
of determining, pension payments. Each year from 2015-16, 5% of the basic pay budgeted for the provincial employees will
be contributed to the Punjab Pension Fund.
Punjab Pension Fund plans to carry out actuarial valuation of Pension and GP Fund
liabilities at June 30, 2014. Funding strategy may have to be reviewed as a result of new estimates
of contingent liabilities.
6.2.5
FUND SIZE
A summary of changes in fund size from July 2013 to May 2014 is given in the following
table:
(Rs. in millions)
17,585
1,800
3,000
1,979
(25)
24,339
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FUNDS PORTFOLIO
30 June 2013
(Amounts in millions)
31 May 2014
Amount
Amount
Amount
9,068
58.1
9,145
52.0
15,316
71.8
489
3.1
237
1.3
593
2.8
Treasury Bills
139
1.0
1,081
5.1
5,339
34.2
5,799
33.0
1,800
10.2
1,000
4.7
Cash at bank
130
0.8
11
0.1
2,693
12.6
Accrued Mark-up
434
2.8
584
3.3
642
3.0
0.0
0.1
14
0.0
15,605
100.0
17,585
100.0
21,339
100.0
3,000
15,605
100.0
17,585
100.0
24,339
Other assets*
Fund Size
Contribution in transit**
Total Fund Size
*Other assets include prepaid expenses for management and book value of fixed assets of the Fund
** Contribution released by the Finance Department but not received till 30-May-2014.
The Fund has been switching exposure between T-bills, short-term bank deposits
and National Saving Schemes in pursuit of higher rates of return.
FUNDS PERFORMANCE
Period
FY 2008-09
FY 2009-10
FY 2010-11
FY 2011-12
FY 2012-13
Jul 2008-Jun 2013 (CAGR) **
July 2013 May 2014
15.00%
13.61%
13.32%
13.79%
12.69%
13.67%
11.95%
Year End
Discount
Rate
YoYCPI
Inflation
Long-term
Benchmark
CPI Inflation
+ 3%
14.00%
12.50%
14.00%
12.00%
10.00%
12.40%
13.14%
12.69%
13.13%
11.26%
5.85%
11.17%
16.14%
15.69%
16.13%
14.26%
8.85%
14.17%
*Net Return means the return after deducting expenses incurred on management of PPF
** CAGR means Compound Annualized Growth Rate
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In order to lock-in high yields for a long period of time, the Fund has invested a large
proportion of its assets in long-term fixed-rate instruments consisting mainly of PIBs. At
the end of May-14, around 71.8% of total portfolio is invested in PIBs.
During FY13, the year-on-year (y-o-y) CPI Inflation rate had declined sharply, and the
SBP reduced the policy rate by 3.0% cumulatively (from 12% to 9%). With the start of
FY14, the newly elected government announced considerable upward adjustments in
electricity, gas and petroleum prices; as a result the y-o-y CPI inflation had started to
accelerate since May 2013 and peaked at 10.90% at the end of November 2013. In
response, to combat rising inflation, SBP also increased its discount rate by 100 basis
points to 10.00%. After touching double digit inflation in Nov 2013, y-o-y CPI softened and
stood at 8.34% in May 2014. We expect that inflation for the full year FY14 will
comfortably remain in single digit. We dont expect any further change in discount rate by
State Bank of Pakistan during remaining part of FY14.
The investment strategy followed over the past few years i.e. investment in long-term
fixed-rate instruments at attractive yields, is now paying off. Despite lower inflation and
discount rates, PPF continues to earn an attractive real rate of return over y-o-y CPI
because of its high yielding portfolio of PIBs
Yield-Curve 2014 vs. 2013
Figure 6.6
0.13
Annualized
0.12
0.11
30-Jun-2013
0.1
41455
41759
0.09
0.08
0.07
Tenors
As per the last Actuarial Assessment Report, the present value of pension liabilities of the
Government of the Punjab stood at Rs. 687.7 billion as on June 30, 2010.
Market value of Funds asset at May 31, 2014 stood at Rs. 24.5 billion.
If PPF were envisaged as a fully funded pension plan, the value of its assets would match the
value of the total pension liability of the Government of the Punjab, and the funding ratio (the
ratio of its assets to its liabilities) would equal one (or 100%). This would mean that for the
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accrued pension liabilities, the Government of the Punjab would not have to earmark any
budgetary resources because these would be met by PPF from the return on its assets.
Currently the Government of the Punjab does not have an explicit target for the Funding Ratio.
The desired Funding Ratio can be inferred from the projected injections of funds in PPF by the
government as stated in the Medium Term Budgetary Framework 2009-12 announced by
Government of the Punjab. If the injections of funds were to stay on course and there were no
withdrawals then at the current average rate of return on PPF funds, the projected funding
ratio in the foreseeable future is expected to stay in the range of 1.75%-2.25%.
When interest rates go down the rate of return on assets also go down and the pension plan
needs a larger amount of assets to pay the pension liabilities promised to the employees. Thus
a decline in interest rates can lower the Funding Ratio of a pension plan further.
Firstly, the Funding Ratio of the pension plan should be high so that sufficient assets vis-vis the liabilities are available. A Funding Ratio of 100% is ideal.
Secondly, the Fund should preferably make long-term fixed-rate investments whose
maturity is as close as possible to the maturity of pension liabilities. With fixed-rate
investments the rate of return on the assets of the Fund will be less vulnerable to the
fluctuations in the market rate of interest.
6.2.6
Currently, the Funding Ratio of the pension plan is around 2% which means that the
current level of assets is sufficient to meet 2% of accrued pension liabilities of the
Government of the Punjab. This Funding Ratio is clearly quite low and the
government may consider increasing this ratio which would require a long-term and
sustainable plan of gradual injection of funds into the pension plan.
Pension and GP Funds liabilities of Government as on June 30, 2010, as per IPSAS 25
reported in the Actuarial Report, has been summarized at Annex-VI of White Paper.
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Chapter 7
PUNJAB REVENUE AUTHORITY
PRA is completing its second financial year. PRA started collection of sales tax only on
such services as were earlier covered under the Punjab Sales Tax Ordinance, 2000. These
included hotels, clubs, caterers, advertisements on T.V & radio (including cable TV), customs
agents, ship chandlers, stevedores, telecommunication, insurance and re-insurance, banking
companies, non-banking financial institutions, stock brokers, shipping agents and courier services.
In October, 2012, three more services were brought under Punjab sales tax net. These were
franchise services, restaurant services, advertisements on hoarding boards, pole signs and sign
boards. In May, 2013, the Punjab sales tax coverage was compared with Sindh sales tax regime
and fourteen more services were added to Punjab sales tax. These included motels, guest houses,
marriage halls and lawns, security alarm systems, international incoming calls, construction
services, property development and promotion, contractual execution of work or furnishing of
supplies, foreign exchange dealers including exchange companies and money changers,
beauty/slimming parlors/clinics, management consultancy including fund and asset management,
port services, terminal operators including public bonded warehouses and international freight
forwarders. In July, 2013, more new services were added such as software or IT-based system
development consultancy, technical, scientific & engineering consultancy, tour operators,
manpower recruitment agency, security agency, mining & exploration services, advertising agents,
share transfer agents, business support services, property dealers, fashion designers, architects,
town planners & interior decorators, rent-a-car, car/automobile dealers and toll manufacturing
services (industrial vending).
Application of Reduced Tax Rate
Standard Punjab sales tax rate is 16%. Telecom services are chargeable to tax @
19.5%. The services of property development/promotion and freight forwarders are chargeable to
fixed rates of tax. PRA is generally not inclined to import unnecessary reduced rate schemes into
Punjab sales tax on services system. So far only stand-alone caterers have been given reduced
rate scheme of 5% (without input tax adjustment). Similar scheme for non-corporate marriage halls
is also under finalization. These two time bound special reduced rate schemes for stand-alone
caterers and non-corporate marriage halls have been proposed/adopted as a tax bait to attract
historically delinquent regimes towards tax compliance in incremental mode. VAT does not
discourage such innovative techniques to allure the obstinate segments from the business
community towards tax compliance in progressive manner. Such special limited schemes
eventually increase taxpayers confidence in the fairness of the tax system.
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Registry
When PRA started its operations, its initial registry consisted of only 615 registrations,
details of which were primarily transferred from FBRs system (through PRAL). Currently, there are
3762 regular registrations besides 848 compulsory registrations (total 4610). Compulsory
registrations are gradually shifting towards regular regime. In addition to these, PRA has, by using
multiple source data and field surveys, identified nearly 9750 service sector businesses, about
which PRA thinks that majority of them is prima facie liable to be registered with PRA and pay
Punjab sales tax. Particulars of all these cases have been sent to the duly empowered field officers
of civil administration (up to tehsil level) with the request to follow them for registration/ compliance
after necessary impartial verifications, if needed, about the character and size of their businesses.
Ever since its establishment, neither PRA nor any taxpayer has faced any problem in
registration for the purpose of Punjab sales tax on services. The businesses already having NTN
number (for income tax purposes) are enrolled on the basis of same-day-principle. The
businesses without NTN route their requests for NTN issuance to FBR through PRA, which is done
by FBR system maximally within 72 hours and PRAs subsequent enrolment is issued instantly
without any further loss of time. No fee is charged for enrolment or registration or for any
amendment in registration particulars and returns/statements etc. PRAs registration base is
increasing on daily basis.
Revenue Achievements
As against Punjabs share of Rs.22 billion for the year of 2011-12, PRA collected over
Rs.37 billion during 2012-13. For the year 2013-14, a target was worked out at Rs.52.2 billion
which was optimistically uplifted to Rs.62.2 billion considering that PRA would be able to bridge the
carried-over compliance gaps. However, during the first eleven months PRA has collected Rs.39.4
billion. The gap between targets and receipts is easily explainable. For the first eleven months, the
proportionate target comes to Rs.39.87 billion, against which Rs.39.4 billion have been collected.
Short fall is only of 1.19% which is likely to be made up by the end of June, 2014. The following
table shows the month-wise revenue receipts followed by graphics of monthly revenue growth
patterns:
Table 7.1
Month Wise Collections
(Figures in Pk. rupee)
Sr.No
1
2
3
4
5
6
7
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Month
July-13
August-13
September-13
October-13
November-13
December-13
January-14
Revenue
3,279,463,596
3,444,668,441
3,242,429,550
3,403,791,884
3,454,903,267
3,525,070,081
3,419,557,439
Budget 2014-15
Sr.No
8
9
10
11
91
Month
February-14
March-14
April-14
May-14
TOTAL
Revenue
3,970,873,579
3,471,472,164
4,010,300,895
4,171,502,031
39,394,032,927
Figure 7.2
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Sector
Telecom
Non-Tele(Total)
Non-Tele(Old Services)
Overall
2012-13(11months)
24,816.0
8,205.5
8,205.5
33,021.5
2013-14 (11months)
23,662.6
15,731.0
12,932.0
39,393.6
Change
%age
(1,153.40)
7,525.50
4,726.50
6,372.10
-4.6%
91.7%
57.6%
19.3%
Figure 7.3
2013-14
39,393.6
33,021.5
24,816.0
23,662.6
15,731.0
8,205.5
Telecom
12,932.0
8,205.5
Overall
Budget 2014-15
93
Sector
Telecom
Banks
Couriers
Hotels
Restaurants
Insurance
Franchise
Clearing Agent
Withholding Agents
Others
Total
2012-13
(11-months)
24,816.0
2,155.3
781.9
1,096.3
579.9
1,922.0
272.3
50.0
359.6
988.3
33,021.6
2013-14
(11-months)
23,662.6
3,040.0
1,098.0
1,273.4
1,199.6
2,389.2
1,321.2
82.0
891.3
4,436.3
39,393.6
Figure 7.4
Change
-1153.4
884.66
316.13
177.14
619.7
467.18
1048.93
32
531.72
3447.95
6372.01
%age
increase
-4.6
41.0
40.4
16.2
106.9
24.3
385.2
64.0
147.9
348.9
19.3
2013-14
39,393.6
33,021.5
24,816.0
23,662.6
15,731.0
8,205.5
Telecom
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12,932.0
8,205.5
Non-Tele (Total)
Non-Tele (Old Services)
Overall
Budget 2014-15
94
Figure 7.5
The experience so far gained shows that most of the compliance problems are coming
from regimes which have either remained untaxed in the past or have traditionally defied tax
compliance.
Expenditure Budget Scenario
During 2013-14, PRA obtained budget allocation of Rs.200 million. During the first 10
months, it spent only Rs.110 million. It is expected that by the end of the year, the total expenditure
will be nearly Rs.167 million. Out of this, the major spending has gone to the payment of service
charges to PRAL, fixed liabilities of rentals and outsourced services and acquisition of
durable/capital goods. The salary component was only Rs.31 million. The balance of Rs.33 million
(which also included economy cut) is being surrendered to the government. PRA believes that
collection cost of sales tax on services in the province of Punjab is the lowest as compared to
comparable tax organizations in the country.
Inter tax issues
PRA is already proactive and is in consultation with FBR and other sub-national VAT
organizations for earlier resolution of the issues of mutual concern/interest. Like Sindh, Punjab too
agreed to sign MOU with FBR for reciprocal input tax adjustment with an inbuilt mechanism for
periodical settlements of claims on the basis of a principle that winner will compensate the loser.
MOU has been signed on 13-03-2014. FBR has also issued the required notification.
Taxpayers education
PRA has conducted over 40 big seminars/workshops in collaboration with civil
administration, trade bodies/associations, tax bar associations etc. wherein the invitees from the
concerned sectors were fully enlightened about the system of Punjab sales tax. The second
regular round of seminars will be undertaken by PRA after the forthcoming budget. Besides, PRA
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95
has been using electronic and print media for the advertisements on Punjab sales tax (publicity is a
continuous feature). Number of FAQs on PRAs website is gradually increasing. These FAQs carry
tremendous importance for the guidance of taxpayers. Most of the taxpayers correspondence with
PRA is online. PRA replies emails within 24 hours. So far 5406 emails have been received and all
stand replied. PRAs average email response time is 11.61 hours (less than 12 hours).PRA website
has recorded 249,784 visits, 89,889 unique visits and 504,203 page views. These figures show a
significant interaction of taxpayers/businesses/public with PRAs website.
IT Developments
Modern tax management cannot be imagined without proper IT-support. Use of
information technology not only enhances the neutrality of tax management besides upgrading its
efficiency and service level but also exponentially economizes upon collection and compliance
costs. PRA is currently availing paid IT services of PRAL for the purpose of collection of Punjab
sales tax. PRA is actively working for avenues for additional ultra-advance IT-based solutions for
compliance issues especially in regimes where underreporting is not an unusual feature of tax
declarations. Restaurant Invoice Monitoring System (RIMS) has been designed by PRA where
under through real time modem-based connectivity, the invoice data of restaurants will be captured
by PRA into its system and propriety of monthly declarations of restaurants will be checked by the
system on the basis of online-retrieved invoice data. The scheme also envisages reward for the
diners/food eaters (customers) so that people themselves persuade and force the restaurants to
issue tax invoices. The rewards shall be given through automated random balloting. In case the
proposed scheme succeeds (which is definitely expected to) other vulnerable business regimes
involving walk-in-customers or spot clientele will also be subjected to similar system-based watch.
Revenue Vision
Based upon R&D work conducted and the experience gained during 2013-14, PRA has
developed a precise and comprehensive 7-points budget vision for the year 2014-15. These points
cover abridgment of experientially identified operational gaps, rationalization of description,
codification, nomenclature and classification of taxable services, inclusion of new services,
indigenization of IT capacity/operations, formal launching of (non-intrusive) audit operations and
systematic HR development and resource mobilization. With the materialization of these points,
PRA is expecting to bring a further robust revenue growth in the year 2014-15 especially in
services other their telecom.
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Chapter 8
LOCAL GOVERNMENT FINANCE
Under the Punjab Local Government Ordinance 2001 a Provincial Finance
Commission Award was envisaged as basis of allocation for Local Governments. The PFC Award
established an inter-se share of various tiers of Local Governments through a system of
percentage shares based on a matrix of population performance-need continuum. The share of
Districts/City Districts and TMAs has accordingly been prescribed under four generic categories of
tied, general purpose, development and equalization grants. In addition TMAs receive Urban
Immovable Property Tax proceeds and City District Governments receive additional resources to
perform municipal functions. Funds are provided to Unions on fixed share basis. Cantonment
Boards receive share in lieu of Octroi on the basis of their respective populations. The allocations
for local governments have been growing since the promulgation of the Punjab Specification and
Distribution of Provincial Resources Order, 2006. As such District Governments, TMAs and
Councils received the following share:
Table 8.1
Allocation to Local Governments under the PFC Award, 2006
(Rs. in Billion)
Year
District
Governments
Tehsil Municipal
Administrations
Union
Administrations
Cantonment
Boards
2010-11
131.653
13.800
5.019
1.200
2011-12
148.000
15.570
5.019
1.200
2012-13
186.783
17.000
6.000
1.200
2013-14
214.800
17.000
6.000
1.200
2014-15
236.280
17.000
6.000
1.200
Under the PFC Award, 2006 there has been progressive increase in the allocations for
Local Governments. Beginning from financial year 2010-11 the allocations for District Government
has increased from Rs. 131.653 billion to Rs. 214.800 billion in financial year 2013-14. The
allocation for TMAs has increased from Rs. 13.8 billion in financial year 2010-11 to Rs.17.000
billion in financial year 2013-14. Similarly, the allocation for Union Administrations has increased
from Rs. 5.019 billion to Rs.6.000 billion in 2013-14 and the Cantonment Boards have been
receiving a steady annual allocation of Rs.1.2 billion for the past four financial years.
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In the fiscal year 2013-14, Local Government Finance experienced a special dispensation
whereby Local Governments as they received greater Provincial Government allocations for better
governance through special grants and packages in addition to the formula based fiscal transfers
under the Provincial Finance Commission Award. These extra-PFC allocations included grants for
Solid Waste Management, Bail-out packages for District Governments and TMAs, Grants for
PHAs, Grants for Schools and Primary Health Care, District Development Packages, Development
Grants for Large Cities, etc. A more vivid picture of transfers to Local Governments transpires
when PFC and extra-PFC grants are seen in conjunction.
Figure 8.2
Allocations to Local Governments
Provincial
Finance
Provincial
Retained
Provincial
Allocable
Union
Administratio
Provincial
ADP
TMAs
District / City
Government
Local Government
ADP
The above figure reflects that Local Governments receive grants under the Provincial
Retained Amount and through the Annual Development Programme of the Province in addition to
grants from the Provincial Allocable amounts under Provincial Finance Commission Award.
However, District Governments have been able to generate only Rs.37,196,567 million in
the preceding financial year as their own revenues which averages at 0.021% percent of their
overall resources. Similarly, TMAs generated a total of Rs.97,839.434 million whereas under the
PFC share alone the TMAs received Rs.11,955.669 million. Thus, Local Governments remain
clearly dependent on provincial allocations. This is despite the provision of an elaborate taxation
regime in the second schedule of the Punjab Local Governments Ordinance, 2001. Local
Governments have been able to generate the following amounts as their own source revenue:-
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Table 8.3
Own Source Revenue Receipts of District Governments
2007-08
109,466.958
4,746.402
114,213.360
(Rs. in Million)
% of Own
Receipts
against G.Total
4.16%
2008-09
124,868.722
6,926.613
131,795.335
5.26%
2009-10
131,236.938
4,043.428
135,280.366
2.99%
2010-11
143,276.078
2,434.891
145,710.969
1.67%
2011-12
172,357.448
4,256.024
176,613.472
2.41%
2012-13
212,884.841
3,094.716
215,979.557
1.43%
2013-14
221,637.377
37.196
221,674.573
0.02%
Financial Year
Transfers
Own Receipts
Grand Total
Table 8.4
Overall Allocation to Districts and TMAs
Years
Development
Original Budget Revised Estimate
(Rs. in Million)
Current
Original Budget Revised Estimate
2008-09
12,000
36,051
106,155
105,205
2009-10
12,000
31,420
118,000
121,078
2010-11
12,000
21,119
151,672
150,587
2011-12
12,000
16,576
169,789
187,205
2012-13
12,000
24,090
210,983
216,924
2013-14
12,000
24,171
239,000
237,460
2014-15
12,000
--
260,480
--
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Chapter 9
PUBLIC FINANCIAL MANAGEMENT REFORM
Public Financial Management (PFM) is a process by which governments translate public
resources into public services. It is a critical tool for Government to achieve policy objectives and
development goals, as defined by the policymakers. Built around the principles of transparency and
accountability, it helps build bridges between the state and citizens.
PFM reforms are at the vanguard of provincial reform agenda with focus on aggregate
fiscal discipline, resource allocation based on agreed priorities and efficient use of available
resources for delivery of high quality public services and accountability. These are invariably very
complex and long term and, by very nature, a political exercise. They require proper prioritization,
sequencing and, above all, ownership of the stakeholders.
The provincial government rolled out several reforms over the past several years in the
province, with varying degrees of success. The following is an account of on-going as well as
contemplated reform initiatives:
PFM Reforms at Provincial Level:
The Finance Department has been spearheading PFM Reforms in the province and has
developed a roadmap, which broadly gives a policy direction to the reforms. With technical support
from international development partners, the provincial government is implementing reforms. Sub
National Governance Programme (SNG) United Kingdoms Department for International
Development (DFID) funded programme is supporting the provincial government in implementing
PFM reforms.
(i)
Shift to a more medium term approach, with its emphasis on linking policy, planning
and budgeting, from the traditional annual focus;
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Shift to a top-down approach, driven not only by resource availability but also by the
priorities of government, from a bottom-up approach to budgeting;
Shift towards performance based budgeting, linking inputs to outputs and outcomes,
and away from input based budgeting.
The proposed PFM Reform Strategy aims to improve transparency of budgetary process,
strengthen Medium Term Budget Framework (MTBF) process, improve accountability and
credibility of the budget as well as need for political engagement for ownership of the PFM reforms.
PFM Reform Strategy is built around anchoring the Medium Term Budgetary Framework
(MTBF) in the provincial government. MTBF is key to linking policy, planning and budgeting by
providing multi-year perspective and creating linkages among outcomes, output and costs. In line
with this approach, Government of the Punjab is committed to strengthen MTBF, including Medium
Term Fiscal Framework (MTFF), Budget Strategy Paper and Sector Planning.
(ii)
Availability of and access to complete fiscal and budgetary information is central to PFM
reform. It is a stylized fact that budget transparency and accountability can accrue several
dividends in terms of priorities based allocation; increased responsiveness to peoples needs and
reduced rent seeking. In order to benefit from this approach, a Budget Transparency Review (BTR)
is in the pipeline mainly to improve budget transparency and accountability. The purpose of this
study is to (i) conduct a baseline assessment of current levels of budget transparency and
accessibility based on international good practice, (ii) identify areas of potential reform which if
implemented would improve budget transparency and accessibility, (iii) build the capacity of the FD
to assess and strengthen budget transparency and (iv) provide a basis for FD to respond to the
requirements of Right to Information (RTI) legislation.
(iii)
Protection, preservation and promotion of the interests and aspirations of its masses lend
basis to the existence and legitimacy of the Governments. Governments therefore, stand
answerable to their citizens for what they do and how they do it. Therefore, public policies and
plans should be responsive to and reflective of the needs and priorities of their people.
Implementation efforts of Governments and their outcomes should also be known to the citizens.
On the other side, citizens have a responsibility to hold their governments accountable.
Citizens engagement can be enhanced by creating preconditions that enable people to
contribute in an effective way. One most crucial precondition is that all citizens have easy and ready
access to government information. Technical documents should be made available to the
stakeholders in easy and understandable layout. Needless to underscore budget documents are
highly technical and not user friendly. Complex concepts and terminology are mostly unfamiliar to
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many. Therefore, presentation of budget information in an easy and understandable format seems
imperative to ensure engagement of citizens. While providing the budget information to the
common man, a Citizens Budget provides the government as opportunity to communicate its
perspective and rationale behind various budgetary choices and decisions. For the first time ever,
Government of Punjab is producing a Citizens Budget 2014-15 that would present the budgetary
information to the citizens in a way and layout that is easy to understand.
(iv)
Given that ours is a resource constrained economy, there is always a need for reforming
the revenue side of the provincial finances to create fiscal space to fund better public services. SNG
is trying to assist in creating fiscal space by expenditure savings or generating additional revenue.
In this regard, areas of technical assistance such as tax surveys for broadening of tax bases,
automation of tax bases etc. would be identified to help generate more revenue for the province. On
the other hand initiatives would be implemented to get savings in expenditure. An example of such
initiatives is Pay Roll Audit of Education Sector. While main objective of the payroll audit remains to
provide reasonable assurance that effective controls are in place to ascertain the integrity of
transactions, some sizable fiscal space may also be created as a result of payroll audit. The
exercise is in the pipeline to conduct payroll audit in the education department to identify gaps and
accumulate some savings for the government. The resultant savings might be utilized on much
needed public services.
(v)
Evidence suggests that decentralization of authority and responsibility for service delivery
improves quality and delivery of public services. The creation of the local governments in 2001,
especially the district governments, therefore required predictable, transparent and credible
mechanism for intergovernmental transfers to provide adequate revenues for local services. The
new local government system also provides for PFC mechanism to ensure uninterrupted financing
of devolved service delivery functions through a system of formula based transfers. A study has
been commissioned to assess the effectiveness of PFC transfers in Punjab. The study mainly
appraises the adequacy, predictability and equalization effects of the PFC transfers. Another key
feature of the analysis of the PFC mechanism also assesses the sustainability of local government
expenditures, financed largely through transfers mandated under the PFC. Based on the
recommendations of the study; PFC Award is being redesigned to fund the local governments to
better respond to the needs of their people.
PFM Reforms at District Level:
A few reforms are also being planned at the district level to improve primary and
secondary service delivery in education and health sector. These include:
(i)
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Our district governments are mandated to manage and monitor the provision of basic
services. However, very unfortunately they lack the capacity and the evidence to properly plan and
manage budgets for the service delivery. Budgets at the district level are mainly result of
incremental allocations over the previous year. Hardly any analysis goes into the allocation of
funds. This leads to poor planning and budgeting for the services. In order to assess the needs of
the people and find gaps in planning, budgeting and delivery of services, comprehensive needs
assessment exercises in health and education sector are in the pipeline. The recommendations of
the assessments will help district governments to prepare their budgets based on evidence of the
peoples needs. Needs Assessments in education and health sectors are designed to address
specific service delivery objectives and investigate both generic issues such as flow of funds and
lack of citizen engagement, and the needs of the different groups including women, girls, minorities
and people with disabilities.
(ii)
Efficiency, effectiveness and equity in the use of public resources are primary
preconditions for delivery of quality public service. However, poor mechanisms for tracking and
monitoring allocation and utilization of funds lead to poor public services. Besides unpredictability of
funds allocation and transfers results in poor delivery of public services at the local level.
Resultantly our service delivery units such as Basic Health Units (BHU) and Schools cannot deliver
quality public services. Provincial Government is in the process of streamlining the transfer of funds
from province to the districts and to the actual service delivery units such as BHU. Given that most
of our service delivery units have no Drawing and Dispersing Officer (DDO), tracking of
expenditures becomes impossible beyond DDO level. Therefore, an expenditure tracking exercise
is being carried out to assess funds flow mechanisms and timeliness of transfers of funds to service
delivery unit.
Evidence shows that availability of resources at the service provider level is not sufficient
to produce desired results. Capacity to efficiently utilize the available funds also plays a critical role
to this effect. How efficiently the available funds are utilized is the focus of EQSDS (Expenditure
and Quantity of Service Delivery Survey). A comprehensive EQSDS is also being conducted with
the help of World Bank. The EQSDS will help improve efficiency of public spending for better public
service.
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Glossary
105
GLOSSARY
Bridge Financing: It is a method of financing used to maintain liquidity while waiting for an
anticipated inflow of cash.
Budget: A financial statement of governments estimated revenues and expenditures for the fiscal
year.
Budget Outlay: Total estimate of receipts and expenditures from the sources and for the purposes
indicated in the budget.
Budget Deficit: Excess of government expenditures over revenues raised by taxes, fees and
charges levied by governmental authorities.
Cash Development Loans: The CDLs were raised by the Federal Government to cover its foreign
currency deficits on very high mark up rates in most of the cases and transferred to provincial
governments from time to time.
Capital Gains: Increases in the value of assets over a given accounting period.
Current Capital Expenditure: Current Capital Expenditure like current capital receipt figures both
in the Account No.I and Account No. II of the Provincial Government maintained with the State
Bank of Pakistan. The expenditures under this head in Account No.I consist of the following:
I.
Principal Repayment of Domestic, Foreign and Market Debt. It also includes repayment
on account of Ways and Means Advances availed by the Government of the Punjab from
the State Bank of Pakistan during the financial year.
II. Loans and advances to corporate bodies of the Government of Punjab or associated with
the Government of Punjab.
Expenditures in Account No. II are mainly incurred on state trading operations of the government in
food grains especially procurement of wheat and repayment of loans taken from the commercial
banks for trading operations of Food Department.
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106
Entity: The organizational unit within the government responsible for management and control of
particular resources. In a budgetary framework, each entity shall receive an allocation of funds and
the entity mangers would be responsible for the expenditure incurred.
External Debt: Portion of a governments debt owed to the foreigners / external governments and
institutions
Extraordinary Receipts: Extraordinary receipts were previously reflected as a part of capital receipt
but now are classified as General Revenue Receipts. A significant portion of these receipts accrue
from privatization / disinvestment of government owned assets, and sale of land etc.
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107
Federal Divisible Pool: The biggest source of revenue for the Provincial Government is its share
from the Federal Divisible Pool of Taxes. The Divisible Pool comprises of taxes on income, wealth
tax, capital value tax, taxes on sales and purchases, export duty on cotton, customs duties, GST
(CE Mode) and federal excise duties excluding the excise duty on gas charged at well-head, and
any other tax which may be levied by the Federal Government. With the exception of federal excise
duty on gas, the taxes mentioned above are distributed between the Provinces and the Federal
Government.
Federal Transfers: A payment made by the Federal Government to the province either out of the
Federal Divisible Pool or for other social benefit programs.
Fiscal Capacity: Fiscal capacity is a measure of the ability of a jurisdiction / government to
finance government services.
Fiscal Equalisation: Use of grants to adjust for differences in the capacity to finance basic
government services amongst states / governments.
Fiscal Federalism: Division of taxing and expenditure functions amongst different levels of
government.
Foreign Debt: The money one country owes to another country as a result of loan and / or a
negative balance of trade.
Function: The economic function relating to provision of a particular service, activity or a program.
Fund: The pool of money from where the budget allocation is made e.g. consolidated fund.
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108
Indirect Tax: A charge levied by the state on consumption, expenditure, privilege or right but not
on income or property. Custom duties levied on imports, excise duties on production, sales tax or
value added tax at some stage in production distribution process are few examples of Indirect
Tax.
Incremental Budgeting: Budgetary approach that uses the previous periods budget or actual
performance as a base with incremental amounts added for the new period.
Inflation: In economic terms, inflation is a general increase in prices and fall in the purchasing
value of money.
Land Revenue: Land Revenue means all sums and payments in money received or legally
claimable by or on behalf of the Government from any person on account of any form of land.
Matching Grants: Grants containing the requirement that the recipient government / jurisdiction
will match the money through its own revenues.
MTBF: Medium Term Budgetary Framework (MTBF) is a multi year approach to budgeting which
links the spending plans of the government to its policy objectives in medium term (usually three
years).
Nominal Value: Nominal value refers to a value expressed in money of the day (year etc.) as
opposed to real value which adjusts for the effect of inflation on the nominal value.
Object: Accounting classification describing the item of expenditure, receipt, asset or liability.
Overdraft: An overdraft is a state where the withdrawals exceed the available balance.
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109
Property Tax: A government levy based on the market value as assessed by assessing agency or
based on certain formulas / parameters. It is a capital tax on property calculated on the estimated
value of the property.
Provincial Consolidated Fund: The Fund which comprises all revenues received and all loans
raised by the provincial government and all monies received by it in repayment of any loan.
Public Account: Public Account consists of those moneys for which the Provincial Government
has a statutory or other such obligation to account for but these are not available for appropriation
for the general operations of the Government
Public Debt: Public Debt is the total liability arising from the borrowings of the government
including both domestic loans and foreign (or external) loans.
Public Finance: Field of economics that studies government activities, alternative means of
financing government expenditures and their effects upon the economies in general.
State Trading: State Trading operations of the provincial government relate to procurement and
sale of food grains especially wheat. Transactions pertaining to state trading are kept separately
and their receipts and expenditures are credited and debited to the provincial governments food
account i.e. Account No.II with the State Bank of Pakistan. It is carried out with the borrowing from
commercial banks as per cash credit facility extended by these banks.
Straight Transfers: The expression Straight Transfers used in the White Paper means the
transfers on account of surcharge and royalties on oil and gas made by the Federal Government in
pursuance of the relevant constitutional provisions.
Unconditional Grants: Sharing revenues among governments with no string attached to the use
of funds.
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111
Annex-I
Sr.
No.
(i)
Rate of
Interest
Total
Amount of
Loan
Amount
Repaid
Balance
outstanding
1
2
3
4
5
6
7
8
9
10
11
12
13
1987-88
15.28%
2,881.961
2,881.961
1988-89
14.84%
2,610.940
2,610.940
1990-91
15.93%
7,472.036
5,454.994
1991-92
14.51%
7,331.700
5,467.297
1993-94 (NORMAL)
15.94%
4,640.959
2,454.914
1993-94 (SAP TIED)
15.94%
3,437.940
1,818.522
1994-95 (NORMAL)
15.59%
2,036.459
925.563
1994-95 (SAP TIED)
15.59%
1,215.433
552.481
1995-96 (SAP TIED)
15.94%
994.659
377.429
1996-97 (NORMAL)
16.31%
457.427
143.573
1997-98 (NORMAL)
8.50%
6,000.000
2,424.616
1999-2000 (NORMAL)
11.21%
470.246
120.780
1999-2000 (SAP TIED)
11.21%
4,167.200
1,070.262
Total Cash Development Loans
43,716.960
26,303.332
(ii) CASH DEVELOPMENT LOANS FOR SCARP TUBEWELLS PROJECTS
1
1988-89
14.84%
320.125
320.125
2
1989-90
15.93%
461.174
461.174
3
1990-91
15.93%
554.411
466.651
4
1991-92
14.51%
518.700
339.183
5
1992-93
15.24%
708.055
504.353
6
1993-94
15.94%
709.082
374.613
7
1994-95
15.59%
1,034.210
452.295
8
1995-96
15.94%
1,362.837
502.891
9
1996-97
16.31%
791.617
281.407
10
1997-98
8.50%
707.146
265.266
11
1998-99
17.71%
1,049.209
210.190
12
1999-2000
11.21%
968.059
248.640
13
2000-01
11.70%
922.910
193.488
14
2001-02
10.72%
887.491
167.565
15
2002-03
7.42%
387.173
79.066
16
2003-04
7.20%
320.000
54.906
17
2005-06
9.79%
964.051
79.756
18
2007-08
10.14%
1,075.980
38.855
Total Loans for Scarp Tubewells
13,742.230
5,040.424
TOTAL DOMESTIC LOANS (i) + (II)
57,459.190
31,343.756
White Paper
2,017.042
1,864.403
2,186.045
1,619.418
1,110.896
662.952
617.230
313.854
3,575.384
349.466
3,096.938
17,413.628
87.760
179.517
203.702
334.469
581.915
859.946
510.210
441.880
839.019
719.419
729.422
719.926
308.107
265.094
884.295
1,037.125
8,701.806
26,115.434
Budget 2014-15
Annexes
112
Annex-II
FOREIGN DEBT
1.
IFAD-18-PA (SF)
1.00
Contracted
Amount of Loan
(Foreign
Currency)
$
1.667
2.
IFAD-48-PA (SF)
1.00
3.
IFAD-83-PA (SF)
1.00
4.
IFAD-492-PAK(SF)
0.75
5.
IFAD-825-PAK
0.75
6.
IBRD-3327-PAK (SF)
0.75
11.160
11.160
4.474
6.686
661.914
7.
IBRD-7277-PAK (SF)
LIBOR
12,107.500
11,924.279
2,389.985
9,534.295
9,286.403
8.
IBRD-7379-Pak
LIBOR
11,780.000
11,780.000
11,780.000
11,473.720
9.
IBRD-7380-Pak
LIBOR
50.000
48.865
0.000
48.865
4,837.635
10.
IBRD-7454-Pak
LIBOR
100.000
100.000
0.000
100.000
9,900.000
11.
IBRD-7900-Pak
LIBOR
145.600
87.944
0.000
87.944
8,706.456
12.
PK-P37
2.60
5,016.600
5,016.600
0.000
5,016.600
4,886.168
13.
PK-P50 (SF)
2.30
5,788.761
5,788.761
2,117.835
3,670.926
3,575.482
14.
JBIC-PK-P53
1.30
12,523.000
10,053.525
10,053.525
9,792.134
15.
JBIC-PK-P59
1.30
11,382.000
7,784.927
7,784.927
7,582.518
16.
IDA-106-PAK
0.75
1.750
1.750
1.606
0.144
14.256
17.
IDA-466-PAK (SF)
0.75
9.786
9.786
6.860
2.926
289.674
18.
IDA-620-PAK(SF)
0.75
12.586
12.586
8.252
4.334
429.106
19.
IDA-630-PAK(SF)
0.75
26.600
26.600
17.024
9.576
948.024
20.
IDA-678-PAK
0.75
2.745
2.745
1.715
1.030
101.970
21.
IDA-683-PAK (SF)
0.75
16.366
16.366
10.215
6.151
608.949
22.
IDA-813-PAK (SF)
0.75
12.500
12.500
7.276
5.224
517.176
23.
IDA-892-PAK (SF)
0.75
2.514
2.514
1.400
1.114
110.286
24.
IDA-1109-PAK (SF)
0.75
10.794
10.794
5.292
5.502
544.661
25.
IDA-1113-PAK (SF)
0.75
1.230
1.230
0.588
0.642
63.558
26.
IDA-1163-PAK (SF)
0.75
21.758
21.758
10.656
11.102
1,099.098
27.
IDA-1239-PAK (SF)
0.75
20.181
20.181
9.292
10.889
1,077.995
28.
IDA-1348-PAK (SF)
0.75
4.077
4.077
1.742
2.335
231.157
29.
IDA-1375-PAK (SF)
0.75
5.810
5.810
2.494
3.316
328.284
30.
IDA-1487-PAK (SF)
0.75
27.310
27.310
11.350
15.960
1,580.079
31.
IDA-1603-PAK (SF)
0.75
19.390
19.390
7.178
12.212
1,208.988
32.
IDA-1670-PAK(SF)
0.75
13.809
13.809
4.692
9.117
902.585
33.
IDA-1693-PAK (SF)
0.75
2.989
2.989
1.020
1.969
194.882
Sr.
No.
Loan Number
White Paper
Rate of
Interest
%
6.555
Actual
Disbursement
(Foreign
Currency)
1.667
(Figures in million)
UP TO 30.06.2014
Amount
Outstanding
Outstanding
Repaid
Balance
Balance
(Foreign
(Foreign
(Pak. Rs.)
Currency)
Currency)
1.050
0.617
61.119
6.555
3.854
6.346
6.346
3.555
2.791
276.348
15.073
15.073
2.816
12.257
1,213.443
5.160
510.840
5.160
2.701
267.415
Budget 2014-15
Annexes
113
34.
IDA-1762-PAK (SF)
0.75
Contracted
Amount of Loan
(Foreign
Currency)
$
20.941
35.
IDA-1888-PAK (SF)
0.75
32.521
32.521
17.896
14.625
1,447.909
36.
IDA-1895-PAK (SF)
0.75
83.834
83.834
45.064
38.770
3,838.262
37.
IDA-2003-PAK (SF)
0.75
18.596
18.596
9.290
9.306
921.253
38.
IDA-2004-PAK (SF)
0.75
3.836
3.836
1.872
1.964
194.429
39.
IDA-2154-PAK (SF)
0.75
7.624
7.624
3.456
4.168
412.622
40.
IDA-2245-PAK
0.75
22.248
22.248
8.896
13.352
1,321.848
41.
IDA-2257-PAK (SF)
0.75
5.825
5.825
2.336
3.489
345.380
42.
IDA-2354-PAK (SF)
0.75
65.693
65.693
22.988
42.705
4,227.811
43.
IDA-2383-PAK (SF)
0.75
4.028
4.028
1.404
2.624
259.745
44.
IDA-2464-PAK (SF)
0.75
11.262
11.262
3.408
7.854
777.511
45.
IDA-2468-PAK (SF)
0.75
31.150
31.150
10.117
21.033
2,082.267
46.
IDA-2593-PAK(SF)
0.75
23.820
23.820
5.960
17.860
1,768.128
47.
IDA-2999-PAK (SF)
0.75
16.849
16.849
2.954
13.895
1,375.605
48.
IDA-3050-PAK (SF)
0.75
20.190
20.190
3.024
17.166
1,699.405
49.
IDA-3776-PAK (SF)
0.75
7.892
7.559
0.378
7.181
710.891
50.
IDA-3855-Pak
0.75
100.644
100.644
1.258
99.386
9,839.179
51.
IDA-4046
0.75
96.469
96.469
0.000
96.469
9,550.403
52.
IDA-4176
0.75
102.573
102.573
0.000
102.573
10,154.727
53.
IDA-4258-Pak
0.75
46.000
45.650
0.000
45.650
4,519.361
54.
IDA-4317-Pak
0.75
99.426
99.426
0.000
99.426
9,843.204
55.
IDA-4586-Pak-PESRP
1.50
350.000
353.341
0.000
353.341
34,980.759
56.
IDA-4890-Pak-PESRP
1.50
50.000
48.479
0.000
48.479
4,799.440
57.
1.25
250.000
87.190
0.000
87.190
8,631.769
1.25
350.000
191.307
0.000
191.307
18,939.390
59.
IDA-5081-Pak (PIPIP)
IDA-5106-Pak (PESPII)
IDA-5151-Pak LRMISP
1.25
70.000
15.807
0.000
15.807
1,564.874
60.
IDA-5153-Pak (PCGIP)
1.25
145.000
56.720
0.000
56.720
5,615.280
61.
IDA-5314-PPMRP
1.25
50.000
5.000
0.000
5.000
495.000
62.
IDB-0079-Pak
2.50
ID
3.777
3.777
1.974
1.803
287.826
63.
ADB-331-PAK (SF)
1.00
39.500
39.500
33.970
5.530
547.470
64.
ADB-433-PAK (SF)
1.00
2.850
2.850
2.233
0.617
61.083
65.
ADB-495-PAK (SF)
1.00
13.118
13.118
9.694
3.424
338.952
66.
ADB-734-PAK
1.00
19.456
19.456
11.291
8.165
808.333
67.
ADB-750-PAK (SF)
1.00
40.425
40.425
21.816
18.609
1,842.275
68.
ADB-758-PAK
1.00
15.026
15.026
8.117
6.909
684.001
69.
ADB-759-PAK (SF)
1.00
5.985
5.985
3.240
2.745
271.729
70.
ADB-851-PAK (SF)
1.00
5.670
5.670
3.266
2.404
237.964
71.
ADB-871-PAK (SF)
1.00
25.633
25.633
14.733
10.900
1,079.058
72.
ADB-901-PAK (SF)
1.00
44.536
44.536
24.496
20.040
1,983.941
Sr.
No.
58.
Loan Number
White Paper
Rate of
Interest
%
Actual
Disbursement
(Foreign
Currency)
20.941
UP TO 30.06.2014
Amount
Outstanding
Repaid
Balance
(Foreign
(Foreign
Currency)
Currency)
6.810
14.131
Outstanding
Balance
(Pak. Rs.)
1,398.954
Budget 2014-15
Annexes
114
Sr.
No.
Loan Number
73.
ADB-916-PAK (SF)
1.00
Contracted
Amount of Loan
(Foreign
Currency)
$
6.018
74.
ADB-917-PAK (SF)
1.00
45.061
44.171
23.190
20.981
2,077.133
75.
ADB-973-PAK (SF)
1.00
10.738
10.738
5.092
5.646
558.954
76.
ADB-977-PAK (SF)
1.00
17.805
17.805
8.465
9.340
924.631
77.
ADB-1012-PAK
1.00
24.117
24.117
11.447
12.670
1,254.308
78.
ADB-1146-Pak
1.00
111.888
111.888
0.000
111.888
11,076.905
79.
ADB-1185-PAK (SF)
1.00
79.163
79.163
25.737
53.426
5,289.129
80.
ADB-1200-PAK
1.00
13.147
13.147
4.267
8.880
879.097
81.
ADB-1209-PAK
1.00
39.206
39.206
12.740
26.466
2,620.132
82.
ADB-1210-PAK (SF)
1.00
17.454
17.454
5.668
11.786
1,166.773
83.
ADB-1260-PAK
1.00
48.134
48.134
13.243
34.891
3,454.203
84.
ADB-1297-PAK(SF)
1.00
46.351
46.351
12.739
33.612
3,327.541
85.
ADB-1301-PAK
1.00
56.670
56.670
14.160
42.510
4,208.512
86.
ADB-1350-PAK
1.00
2.803
2.803
0.665
2.138
211.666
87.
ADB-1373-PAK
1.00
15.946
11.717
2.636
9.081
898.992
88.
ADB-1401-PAK
1.00
50.662
50.662
10.761
39.901
3,950.204
89.
ADB-1454-Pak(SF)
1.00
29.947
29.947
5.610
24.337
2,409.395
90.
ADB-1467-PAK
1.00
30.655
30.655
5.745
24.910
2,466.108
91.
ADB-1493-PAK
1.00
64.479
64.479
12.090
52.389
5,186.486
92.
ADB-1531-PAK
1.00
30.842
30.842
5.018
25.824
2,556.576
93.
ADB-1534-Pak
1.00
14.671
14.671
2.392
12.279
1,215.621
94.
ADB-1578-PAK
1.00
14.909
14.909
2.418
12.491
1,236.603
95.
ADB-1671-PAK (SF)
1.50
15.800
13.207
4.127
9.080
898.891
96.
ADB-1679-PAK
1.00
7.968
7.968
1.100
6.868
679.926
97.
ADB-1877-PAK
1.50
28.068
28.068
7.894
20.174
1,997.204
98.
ADB-1878-PAK
LIBOR
14,176.659
31.698
14.482
1,433.705
99.
ADB-1900-PAK
1.50
4.967
0.667
0.125
0.542
53.686
100.
ADB-1928-PAK
0.75
18,396.800
8,762.487
4,592.112
4,170.376
4,061.946
101.
ADB-1950-PAK (SF)
1.50
50.000
53.694
7.833
45.861
4,540.200
102.
ADB-2030-PAK (SF)
LIBOR
21,761.000
21,761.000
10,554.085
11,206.915
10,915.535
103.
ADB-2031-Pak (SF)
1.50
1.897
1.897
0.198
1.700
168.255
104.
ADB-2060-Pak (SF)
1.50
45.000
24.535
2.555
21.980
2,176.039
105.
ADB-2061-Pak
LIBOR
4,896.225
2,743.518
322.638
2,420.880
2,357.938
106.
ADB-2134-Pak
1.50
41.000
28.785
2.546
26.239
2,597.649
107.
ADB-2144-Pak
LIBOR
7,995.750
7,995.750
3,109.657
4,886.093
4,759.054
108.
ADB-2145-Pak
1.50
75.000
75.594
7.087
68.508
6,782.243
109.
ADB-2211
LIBOR
20.000
11.473
0.773
10.699
1,059.240
110.
ADB-2212
1.50
40.000
2.228
0.05
2.182
215.977
111.
ADB-2286-Pak
LIBOR
5,599.000
2,061.616
0.000
2,061.616
2,008.014
White Paper
Rate of
Interest
%
Actual
Disbursement
(Foreign
Currency)
6.018
UP TO 30.06.2014
Amount
Outstanding
Repaid
Balance
(Foreign
(Foreign
Currency)
Currency)
3.192
2.826
$ 46.179
Outstanding
Balance
(Pak. Rs.)
279.726
Budget 2014-15
Annexes
Sr.
No.
115
Loan Number
Rate of
Interest
%
Contracted
Amount of Loan
(Foreign
Currency)
$
5.000
Actual
Disbursement
(Foreign
Currency)
-
UP TO 30.06.2014
Amount
Outstanding
Repaid
Balance
(Foreign
(Foreign
Currency)
Currency)
-
Outstanding
Balance
(Pak. Rs.)
112.
ADB-2287-Pak
1.50
113.
ADB-2299-Pak
LIBOR
25,637.827
11,058.439
0.000
11,058.439
10,770.920
114.
ADB-2300-Pak
1.50
10.000
5.797
0.000
5.797
573.931
115.
ADB-2385-Pak
LIBOR
250.000
250.000
45.750
204.250
20,220.750
116.
ADB-2386-Pak
1.50
8.800
6.923
0.000
6.923
685.377
117.
ADB-2485-Pak
1.50
100.000
95.974
0.000
95.974
9,501.382
118.
ADB-2547-Pak PGEIP
LIBOR
75.000
75.000
7.264
67.736
6,705.871
119.
ADB-2548-Pak PGEIP
1.50
75.000
76.466
0.000
76.466
7,570.122
120.
ADB-2644-Pak
1.50
150.000
150.969
0.000
150.969
14,945.949
121.
ADB-2841-Pak
1.50
270.000
51.614
0.000
51.614
5,109.786
122.
ADB-2971-Pak
123.
OFID-1134-P
French Loan-Extension
of Water Resources for
Faisalabad City Phase-I
124.
73.000
6.194
0.000
6.194
613.206
2.50
5.250
3.876
0.000
3.876
383.724
1.60
33.440
24.173
0.000
24.173
3,270.160
Total
417,445.739
ADB-2216-Pak
LIBOR
(Rs. in million)
$
200.000
12,047.360
3,846.723
8,200.637
8,200.637
425,646.376
Total $
3,357.757
332,417.920
Total
83,644.593
81,469.834
Total Rs.
Rs.
8,200.637
8,200.637
ID
1.803
287.826
24.173
3,270.160
Total Euro
24.173
3,270.160
425,646.376
White Paper
Budget 2014-15
Annexes
116
Annex-III
Year
Expected
Pension
Expected
Commutation
Expense
2014- 15
36.3
9.7
46.0
2019 - 20
62.8
17.7
80.5
2024 - 25
111.3
34.9
146.2
2029 - 30
193.2
54.6
247.8
2034 - 35
297.0
52.3
349.3
2039 - 40
442.8
80.9
523.7
White Paper
Budget 2014-15
Annexes
117
Annex-IV
Total Expense
2014 15
6.4
2019 20
13.5
2024 25
40.0
2029 30
49.4
2034 35
55.8
2039 40
99.3
White Paper
Budget 2014-15
Annexes
118
Annex-V
Year
Expected GP Fund
Liability
2014 15
160.5
2019 20
288.4
2024 25
452.4
2029 30
646.4
2034 35
1,070.5
2039 40
1,784.9
White Paper
Budget 2014-15
Annexes
119
Annex-VI
687,725,241
(2,336,136)
(14,208,481)
(137,230,205)
(147,032,363)
(5,570,800)
(12,050,495)
530,537,605
Nil
(3,486,611)
432,894,920
2008-09
Rupees in 000
25,040,019
25,173,434
Interest Cost
71,714,685
61,848,739
(1,228,393)
Nil
(360,000)
Nil
9,802,158
9,802,158
371,387
Nil
23,768,749
Nil
129,468,605
96,464,331
White Paper
Budget 2014-15
Annexes
120
Sources
Salary Increase
New Entrants
Benefit Changes
Indexation
Total
Actuarial
(Gain)/Loss
Total Increase /
(Decrease)
In Liability
Non-vested
(35.5)
2.8
23.8
5.9
23.8
5.9
22.8
(9.9)
(35.5)
2.8
29.7
22.8
19.8
2008-09
Rupees in 000
597,622,375
515,406,161
25,040,019
25,173,434
Interest Cost
Non-vested Past Service Cost due to benefit changes during
the year
Vested Past Service Cost due to benefit changes during the
year
Benefits paid
71,714,685
61,848,739
(24,625,920)
(18,654,440)
(11,736,854)
13,848,481
5,942,187
Nil
23,768,749
Nil
687,725,241
597,622,375
2008-09
Rupees in 000
3,486,611
3,486,611
9,000,000
1,228,393
Nil
360,000
(1,800,000)
Nil
Benefits paid
Nil
Nil
White Paper
135,491
12,050,495
(360,000)
3,486,611
Budget 2014-15
Annexes
121
Corroboration of Results
2009-10
Rupees in 000
432,894,920
129,468,605
(24,625,920)
1,800,000
(9,000,000)
530,537,605
definitions given in paragraph 10 of the Standard, Employee Benefits are all forms of
consideration given by an entity in exchange for service rendered by employees;
introduction note IN1 of the Standard, benefits that are not consideration in exchange for
service rendered by employees or past employees of reporting entities are not within the
scope of this Standard; and
Keeping in view the above paragraphs and the nature of the GP Fund benefit, it is interpreted that
reporting of this scheme does not fall under this Standard. However, if disclosures are prepared as
per IPSAS25, they would be as follows:
GP Fund Liability Disclosures under IPSAS 25
Statement of Financial Position (under Paragraph 65. of IPSAS 25)
White Paper
Budget 2014-15
Annexes
122
2008-09
Rupees in 000
Nil
Nil
Interest Cost
9,586,223
8,615,641
(6,399,247)
Nil
Nil
Nil
3,186,976
8,615,641
The reason of decrease in P&L Charge is liability adjustment of Rs.6.399 billion during the
year.
2008-09
Rupees in 000
79,185,192
69,275,369
9,586,223
8,615,641
Benefits paid
(1,090,747)
(3,749,092)
5,600,000
5,043,274
(6,399,247)
Nil
86,881,421
79,185,192
Corroboration of Results
Rupees in 000
Statement of Financial Position as at 30th June 2009
79,185,192
3,186,976
(1,090,747)
5,600,000
86,881,421
White Paper
Budget 2014-15